Mortgage applications spiked 30.2% from last week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

This means on a seasonally adjusted basis, the index grew by 30.2% for the week ending on Jan. 10, 2020.

On an unadjusted basis, the index rose 67% compared to the previous week.

Joel Kan, the associate vice president of economic and industry forecasting at MBA said the mortgage market has seen a strong start so far in 2020.

“[This week] applications increased across the board, and the 30- year fixed mortgage rate hit its lowest level since September 2019,” Kan said. “Refinances increased for both conventional and government loans, as lower rates provided a larger incentive for borrowers to act.”

However, Kan said it remains to be seen if this strong refinancing pace is sustainable, as levels are still below what occurred last fall.

According to the organization, the Refinance Index rose by 43% from a week ago, while the seasonally adjusted Purchase Index grew by 16% and the unadjusted Purchase Index increased by 51%.

The Refinance Index was also 109% higher than the same week last year, indicative of the low interest rate environment that exists now that didn’t exist at the beginning on 2019.

Meanwhile, the unadjusted Purchase Index was 8% higher than the same week last year.

“Homebuyers were active the first week of the year,” Kan said. “Purchase activity was 8% higher than a year ago, and the purchase index increased to its highest level since October 2009.”

Kan said moving forward, the nation’s low rates and solid job market will continue to encourage prospective buyers to enter the market.

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

  • The refinance share of mortgage activity increased to 62.9% from last week’s 58.9%.
  • The adjustable-rate mortgage share of activity increased to 4.5% of total applications.
  • The Federal Housing Administration’s share of mortgage apps moved forward to 12.7% from last week’s 12.2%.
  • The Department of Veterans Affairs share of applications fell to 12.1% from last week’s 14.1%.
  • The Department of Agriculture’s share of total applications held steady at 0.5%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to the lowest level since September of last year, coming in at 3.87%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) declined to the lowest level since November 2016, coming in at 3.83%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to the lowest level since October 2019, coming in at 3.78%.
  • The average contract interest rate for 15-year fixed-rate mortgages fell to the lowest level since September 2019, coming in at 3.3%.
  • The average contract interest rate for 5/1 ARMs increased to 3.35% from last week’s 3.19%.

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