But purchase activity was subdued while still building year-over-year
Another drop in 30-year mortgage rates meant an increase for applications last week, especially for refinances.
The Mortgage Bankers Association’s weekly survey of lenders found that overall applications were up 5.2% seasonally adjusted and 5% unadjusted according to its Market Composite Index.
Refinance activity was strong with a 10% rise in the Refinance Index, taking it 163% above its year ago level.
For the Purchase Index there was a 1% decrease both seasonally adjusted and unadjusted but the index was still 10% higher than a year earlier.
"US 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. 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," said Joel Kan, Associate Vice President of Economic and Industry Forecasting.
Share of activity
- The refinance share of mortgage activity increased to 60.4%of total applications from 58.0%the previous week;
- The ARM share of activity decreased to 5.3% of total applications;
- The FHA share of total applications decreased to 10.3% from 10.4% the week prior;
- The VA share of total applications decreased to 12.3% from 12.4% the week prior;
- The USDA share of total applications remained unchanged from 0.5 percent the week prior.
Average contract rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.90% from 3.99%, with points decreasing to 0.37 from 0.38 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 3.90% from 3.98%, with points remaining unchanged at 0.28 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.75 percent from 3.79 percent, with points increasing to 0.29 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.35% from 3.43%, with points decreasing to 0.30 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 3.25% from 3.42%, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
