The market composite index, which measures mortgage loan application volume, increased by 2.9 percent on a seasonally adjusted basis. On an unadjusted basis, the index rose by 2 percent from the previous week.
The refinance index increased 3 percent from the week before, and was 60 percent higher year over year.
The seasonally adjusted purchase index increased 3.0 percent from the previous week, while the unadjusted purchase index increased 0.2 percent week over week and was 40 percent higher than the year before.
“Mortgage rates declined last week, with a noteworthy 5-basis-point decrease in the 15-year fixed rate to a new record low of 2.62 percent,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “The drop in rates led to a rebound in a refinancing activity, driven mainly by borrowers applying for conventional loans.”
“Purchase applications were 40 percent higher than the same week last year, but the increase is skewed higher by being compared to Labor Day 2019,” Kan added. “Nevertheless, there continues to be resiliency in the purchase market. Applications were up almost 3 percent on a weekly basis and the average loan size continued to increase, hitting a survey high at $368,600.”
Refinances increased to 63.1 percent of total mortgage applications, up from 62.5 percent the week before.
Federal Housing Administration (FHA) applications remained constant from the week before at 10.2 percent of all applications. Likewise, U.S. Department of Agriculture (USDA) loan applications remained the same from the previous week at 0.6 percent. U.S. Department of Veterans Affairs (VA) loans, however, declined from 11.4 percent of all loan applications the week prior to 11.2 percent.
Across conforming loan balances ($510,400 or less) and jumbo loans ($510,400 or greater), contract interest rates saw declines from the week previous. On 30-year fixed-rate mortgages with conforming loan balances, the average contract interest rate declined from 3.08 percent to 3.07 percent with points remaining the same at 0.36 for 80 percent loan-to-value ratio (LTV) loans. On 30-year fixed-rate mortgages with jumbo loan balances, the average contract interest rate decreased from 3.41 percent the week before to 3.40 percent with points declining to 0.31 from 0.38 for 80 percent LTV loans.
FHA-backed 30-year fixed-rate mortgages saw the average contract interest rate decrease to 3.16 percent from 3.19 percent the week before. Points increased from 0.34 to 0.42 for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages also decreased from 2.67 percent the week before to 2.62 percent, with points dropping to 0.33 from 0.36 for 80 percent LTV loans.