Plummeting interest rates prompted more U.S. borrowers to refinance their mortgages for the week ending July 13, pushing overall mortgage applications up 16.9% from the previous week.
The Mortgage Bankers Association noted that the refinance index grew 22% over the prior week, reaching its highest level since mid-June. The seasonally-adjusted purchase index remained mostly the same, edging down a slight 0.1%.
"Refinance application volume increased last week to near peak levels for the year as mortgage rates dropped to a new low, driven down by growing concerns about the health of the U.S. economy," said Mike Fratantoni, MBA’s vice president of research and economics. "Applications for HARP refinance loans accounted for 24% of refinance activity last week, in line with the HARP share for the past few weeks."
In addition, the refinance share of mortgage activity rose to 80.1% of total applications, an increase from 77% from the previous week. The adjustable-rate arm share of activity, meanwhile, declined to 4.1% of all applications.
The average interest rate for a 30-year, fixed-rate mortgage with a conforming loan limit of $417,500 or less declined from 3.79% to 3.74%. Meanwhile, the 30-year, FRM with a jumbo loan balance declined from 4.05% to 3.98%, the lowest rate in the survey's history.
The average interest rate for a 30-year, FRM backed by the FHA declined from 3.63% to 3.55%, while the 15-year, FRM declined from 3.15% to 3.12%.
In addition, the average contract interest rate for a 5/1 ARM remained unchanged at 2.71%, matching the lowest rate recorded for that particular product.