Mortgage application volume increased for a second consecutive week during the week ending Oct. 10, with applications for refinances rising a whopping 11%, on an adjusted basis, and applications for purchases rising 1%, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
Overall, application volume was up 5.6% compared to one week earlier. On an unadjusted basis, volume increased 6%.
Purchase application volume remains weak: It was 4% lower, on an unadjusted basis, compared to the same week one year ago. On an unadjusted basis, purchase applications decreased 0.3% compared with the previous week.
Driving the growth in refinance application volume is the fact that fixed mortgage rates dropped to their lowest levels in more than a year.
‘Growing concerns about weak economic growth in Europe caused a flight to quality into U.S. assets last week, leading to sharp drops in interest rates,’ says Mike Fratantoni, chief economist for the MBA, in a statement.
The refinance share of mortgage activity increased to 59% of total applications, up from 56% the previous week.
The average rate for a 30-year fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.20%, down from 4.30% to reach its lowest level since June 2013.
The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.14%, down from 4.21% to reach its lowest level since May 2013.
The average rate for a 30-year FRM backed by the Federal Housing Administration was 3.90%, down from 4% to reach the lowest since June 2013.
The average rate for a 15-year FRM decreased was 3.41%, down from 3.48%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.05%, down from 3.20% to reach the lowest level since June 2013.
The ARM share of activity increased to 8% of total applications.