Consumers are applying for mortgage loans using more government applications compared to last week, and while the industry adjusts to the TILA-RESPA Integrated Disclosure (TRID) rule, applications are expected to become more volatile.
Mortgage applications rose 11.8 percent from last week, including an adjustment for the Columbus Day holiday. The Mortgage Bankers Association 's (MBA) Weekly Mortgage Applications Survey  for the week ending October 16, 2015 determined that the increase was mostly driven by government applications.
MBA found that the market composite index, which measures mortgage loan application volume, rose 11.8 percent on a seasonally adjusted basis from one week earlier. Meanwhile, on an unadjusted basis, the index increased 1 percent from last week.
The refinance index experienced a 9 percent increase from the previous week, the survey showed. The seasonally adjusted purchase index increased 16 percent from one week earlier, while the unadjusted purchase index increased 5 percent from last week and was 9 percent higher than the same week one year ago.
"On an adjusted basis, application volume increased last week, led by a sharp rebound in government volume. We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures," said Mike Fratantoni, MBA's chief economist.
According to the survey, the refinance share of mortgage activity decreased to 59.5 percent of total applications from 61.2 percent last week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.9 percent of total applications.
The Federal Housing Administration's share of total applications increased to 14.3 percent from 12.6 percent the previous week. The VA share of total applications increased to 12.7 percent from 11.5 percent the week prior, and the USDA share of total applications increased to 0.6 percent from 0.5 percent.
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