Mortgage applications gained 4.1% last week as mortgage rates fell below 3% for the very first time, according to a report by the Mortgage Bankers Association.
The unadjusted purchase index increased 2% last week and was up 19% compared to last year – the ninth straight week of year-over-year increases for purchase activity, according to the report.
“Applications increased last week despite mixed results from the various rates tracked in MBA’s survey,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “There continues to be strong home-buyer demand this summer, as home shoppers have returned to the market in many states.”
After hitting a record low in MBA’s survey last week, the 30-year fixed rate mortgage rose slightly to 3.2%, however, some creditworthy buyers were offered rates as low as 2.98%, according to the report.
As a result, these low rates drove a 5% weekly gain in refinances and a 122% increase from a year ago, Kan said.
Just as the refinance index increased, refinance’s share of mortgage activity also saw a slight gain from 64.2% of total applications the previous week to 64.8%. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3% of total applications.
The Market Composite Index, a measure of mortgage loan application volume, also gained 4.1% on a seasonally adjusted basis from one week earlier.
Here is a more detailed breakdown of this week’s mortgage application data:
- The FHA’s share of mortgage apps fell to 10.8% from 11.1%.
- The VA share of applications fell to 10.8% from 11%
- The USDA share of total applications remained the same at 0.6%
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 3.2% from 3.19%
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) fell to 3.51% from 3.53%
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.13% from 3.24%
- The average contract interest rate for 15-year fixed-rate mortgages increased to 2.71% to 2.7%
- The average contract interest rate for 5/1 ARMs fell to 2.89% from 3%