Mortgage Loan Application Volume Increases Nearly 5%
The total number of mortgage applications last week rose 4.9% from the prior week pushed up by refinancing activity, which is at the highest level since May 2009, according to the Mortgage Bankers Association. The MBA said its seasonally adjusted refinance index increased 5.7% for the week ended Aug. 20 from the week earlier. The purchase index inched up 0.6% for the week. "The volume of refi applications last week was up 26% over their level four weeks ago. Mortgage rates dropped to their lowest level in the survey, going back to 1990, as incoming data continue to indicate that economic growth has slowed," MBA vice president of research and economics Michael Fratantoni said. "We are at a new 15-month high for the refinance index. 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." Refinancings accounted for 82.4% of total mortgage applications last week, up from 81.4% the previous week and at the highest level since January 2009. MBA said the unadjusted purchase index decreased 1.1% from the previous week and is 38.8% lower than the year ago. In four-week moving averages, the seasonally adjusted market index is up 5%, while the purchase index is off 0.3% and the refinance index is up 6.2%. MBA said interest rates for 30-year fixed and 15-year fixed mortgages are at the lowest rates ever recorded by its survey. The average contract rate for the 30-year fell to 4.55% last week from 4.6% and the 15-year decreased to 3.91% from 3.99%. Meanwhile, the Mortgage Maxx index, which adjusts data to reflect the number of households applying for a mortgage, showed household application activity fell 2.4% last week after rising 5.9% the week before. Write to Jason Philyaw.