Mortgage application volume dipped 0.3% during the week ended October 17, as the average closing rate for a 30-year fixed rate mortgage decreased to 6.37%, down from 6.42% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 4% compared with the previous week and were up 81% compared with the same week one year ago.
Applications for purchases decreased 5% compared with the previous week but were up 20% compared with the same week one year ago.
“The lowest mortgage rates in a month spurred an increase in refinance activity, including another pickup in ARM applications,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The 30-year fixed rate decreased to 6.37 percent and all other loan types also decreased.”
“The refinance index increased 4 percent, driven by a 6 percent increase in conventional refinances and a 12 percent increase in FHA refinance applications, as borrowers remain attentive to these opportunities to lower their monthly mortgage payment. VA refinances bucked the trend and were down 12 percent,” Kan says. “ARM applications increased 16 percent over the week, which pushed the ARM share to 11 percent, with the ARM rate more than 80 basis points lower than the 30-year fixed rate. Purchase applications were down over the week but remained 20 percent higher than a year ago.”
The refinance share of mortgage activity increased to 55.9% of total applications, up from 53.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 10.8% of total applications.
Photo: Herve Margot