Falling interest rates help push mortgage application volume up 3 percent last week, the Mortgage Bankers Association reported today.
According to MBA, the index that tracks refinancings led the increase with a 4.5 percent gain (seasonally adjusted) from the week before, followed by a 1.4 percent rise in the purchase-loan index.
As a result, the refinance share of applications grew to 52.4 percent last week from 52 percent the week before. The adjustable-rate mortgage (ARM) share of activity rose from 15 percent to 17.3 percent.
After five straight weeks of gains, borrowing costs fell across all loan types in the latest survey, MBA reported. The average interest rate on 30-year fixed-rate mortgages dropped 29 basis points, sinking from 6.27 percent to 5.98 percent. The average rate on 15-year fixed loans plunged 51 basis points, from 5.77 percent to 5.26 percent. On one-year ARM loans, the average rate dipped from 5.84 percent to 5.83 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.15 on the 30-year loans, 1.08 on the 15-year, and 0.85 on one-year ARMs. These points include the origination fee and are based on loan-to-value ratios of 80 percent.
The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
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