Data from the Mortgage Bankers Association shows a 21.7% increase in mortgage applications for the week ending August 9.
The Refinance Index increased 37% from the previous week to the highest level since July 2016 and grew annually by 196%.
"The 2019 refinance wave continued, as homeowners last week responded to extraordinarily low mortgage rates. Fears of an escalating trade war, combined with economic and geopolitical concerns, once again pulled U.S. Treasury rates lower. The 30-year fixed mortgage rate decreased eight basis points to 3.93%—the lowest level since November 2016—and has now dropped more than 80 basis points this year," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "In just the last two weeks, rates have decreased 15 basis points and the refinance index has increased more than 50%, reaching its highest level since July 2016. The government refinance index, driven by a 25% increase in VA refinance applications, is now at its highest level since May 2013."
Kan added that purchase applications have been boosted by falling mortgage rates, with purchase activity growing 1.9% and year-over-year growth of 12%.
Freddie Mac’s latest Primary Mortgage Market survey revealed the 30-year fixed-rate mortgage fell to 3.6%— its lowest level since November 2016. A year ago, the 30-year fixed-rate mortgage averaged 4.59% during the same period.
The refinance share of mortgage activity increased to 61.4% of the total application from the prior week’s 53.9%.
Fed’s cut interest rates by a quarter of a point on July 31—the first reduction in nearly a decade.
President Donald Trump on Tuesday halted plans to impose an additional 10% perfect tariff on $300 million worth of Chinese goods. New tariffs were expected to begin on September 1, and they could be delayed until after Christmas.