Last week, the 30-year fixed-rate mortgage fell to the lowest level within the last four weeks. As the rate retreated to a low of 3.9%, the Mortgage Bankers Association indicates it spurred another uptick in refinance demand, resulting in mortgage applications rising by 5.2%.

According to MBA’s Weekly Applications Survey, on an unadjusted basis, the index rose 5.2% for the week ending on October 4, 2019.

Joel Kan, MBA’s vice president of economic and industry forecasting, said this week’s application boost is likely attributed to the nation’s declining mortgage rates, which continue to champion borrower demand.

“U.S. Treasury rates moved sharply lower last week, as data showing weakness in the services sector was a sign that slowing economic growth is not confined to the manufacturing sector,” Kan said. “This, in turn, caused a flight to safety by investors, resulting in mortgage rates dropping across the board, with the 30-year fixed-rate decreasing nine basis points to 3.9%– the lowest level in a month.”

“As seen a few times this year, the large drop in rates caused another surge in refinance applications,” Kan said. “The refinance index increased 10% to its highest level since late August, with both conventional and government refinances experiencing an upswing.”

This means the Refinance Index is now 163% higher than the same time period in 2018.

However, the nation’s purchase index, which Kan describes as muted, declined 1% from last week, signaling a potential slowdown in the months to come.

“Purchase activity was muted, declining almost 1%, but was still 10% higher than a year ago,” Kan said. “Despite low rates, the cloudier economic outlook and ongoing market uncertainty may be keeping some potential homebuyers away from the market this fall.”

Here is a more detailed breakdown of this week’s mortgage application data:

• The refinance share of mortgage activity increased to 60.4% from last week’s 58%.
• The adjustable-rate mortgage share of activity fell to 5.3% of total applications.
• The Federal Housing Administration’s share of mortgage apps slid to 10.3% from last week’s 10.4%.
• The Department of Veterans Affairs share of applications fell to 12.3% from last week’s 12.4%.
• The Department of Agriculture’s share of total applications held steady from last week’s 0.5%.
• Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) fell from last week’s rate of 3.99% to 3.90%.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) declined from last week’s 3.98% to 3.9%.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.75% from last week’s 3.79%.
• The average contract interest rate for 15-year fixed-rate mortgages fell from last week’s 3.43% to 3.35%.
• The average contract interest rate for 5/1 ARMs moved backward to 3.25% from last week’s 3.42%.