Mortgage applications recorded an increase by 13.5 percent on a seasonally adjusted basis, compared to last week, according to the latest Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
"Mortgage applications rose to their strongest level in years last week, with purchase applications rising to the highest since 2010, and refinance applications up to their highest level since last spring," said Mike Fratantoni, SVP and Chief Economist at MBA.
The survey, released on Wednesday, revealed a 45 percent increase from last week in mortgage applications on an unadjusted basis. The Refinance Index reflected an increase of 43 percent in the unadjusted Purchase Index compared to last week—11 percent higher than the same week one year ago.
"Uncertainty regarding the government shutdown, slowing global growth, Brexit, a more patient Fed, and a volatile stock market continued to keep rates from increasing. The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market. The 11 percent gain in purchase volume compared to last year is a promising sign," Fratantoni said.
The volume of refinance loan applications recorded the highest level since January 2018 increasing to 46.8 percent of total applications. The refinance share of mortgages was at 45.8 percent the previous week. An increase in adjustable-rate mortgage (ARM) activities reflected at 9.2 percent of total applications—reaching its highest level since October 2014.
In government loan applications, the FHA increased to 10.9 percent from 10.3 percent in the past week. The survey revealed a drop in VA share of total applications at 10.4 percent this week compared to 11.6 the week prior. The USDA share of total applications also recorded a decline at 0.5 percent from 0.6 percent the week prior.
Here’s how the average contract interest rates performed for various loans:
- For 30-year fixed-rate mortgages with conforming loan balances remain unchanged at 4.74 percent. The effective rate recorded a decline from the week prior.
- The rate for 30-year fixed-rate mortgages with jumbo loan balances increased to 4.53 percent, from 4.52 percent last week. The effective rate decreased from last week for this loan type.
- FHA-backed 30-year fixed-rate mortgages increased to 4.76 percent from 4.70 percent. It recorded an increase in effective rate compared to the past week.
- The 15-year fixed-rate mortgages decreased to 4.13 percent, the lowest level since April 2018, from 4.16 percent. The effective rate for this loan type remained unchanged.
- The rate for 5/1 ARMs increased to 4.08 percent from 4.05 percent, also recording an increase in effective rate from the week prior.