The Mortgage Bankers Association's (MBA) Market Composite Index, a measure of mortgage loan application volume, increased 4.9% on a seasonally adjusted basis for the week ending Aug. 20. On an unadjusted basis, the index increased 4.5% compared with the previous week.
The refinance index increased 5.7% from the previous week and is at its highest level since May 1, 2009. The seasonally adjusted purchase index increased 0.6% from one week earlier. The unadjusted purchase index decreased 1.1% compared with the previous week and was 38.8% lower than the same week one year ago, the MBA says.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.55% from 4.6%, with points decreasing to 0.89 from 0.92 (including the origination fee) for 80% loan-to-value ratio loans – the lowest 30-year contract rate ever recorded in the survey.
"We are at a new 15-month high for the refinance index,’ says Michael Fratantoni, the MBA's vice president of research and economics. ‘With rates this low, many borrowers who refinanced in the past two years may well have an incentive to refinance again, and this is likely increasing refi application activity."
The refinance share of mortgage activity increased to 82.4% of total applications from 81.4% the previous week, which is the highest share observed since January 2009. The adjustable-rate mortgage share of activity increased to 5.8% from 5.7% of total applications from the previous week.
SOURCE: Mortgage Bankers Association