Mortgage application volume increased 6.8% on an adjusted basis during the week ended August 7, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances increased 9% compared with the previous week while applications or purchases increased 2%.
The increase in refinance volume was due to record-low interest rates, while the increase in purchase volume was due to a mixture of low rates and pent-up demand.
On a year-over-year basis, applications for refinances were up 47% while applications for purchases were up 22%.
“Mortgage rates fell across the board last week, as investors grew less optimistic of the economic rebound given the resurgence of virus cases,” explains Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Loan types such as the 30-year fixed, 15-year fixed, and jumbo all reached survey lows. Refi activity responded to these lower rates, with the refi share reaching almost 66 percent of all applications, its highest level since May. And the refi index jumped nine percent, reaching its highest level since April, as both conventional and government applications for refinances increased.
“Home purchase activity continued its strong run with a two percent increase over the week and was up around 22 percent compared to the same week a year ago,” Kan adds. “While this was still positive news for the purchase market, the gradual slowdown in the improvement in the job market and tight housing inventory remain a concern for the coming months, even as low mortgage rates continue to provide support.”
The refinance share of mortgage activity increased to 65.7% of total applications, up from 63.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 2.7% of total applications.
