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Mortgage Activity Increases as Rates Find New Lows

More consumers are applying for a mortgage ├â┬ó├óÔÇÜ┬¼├óÔé¼┬Ø on both the refinance and homebuying fronts ├â┬ó├óÔÇÜ┬¼├óÔé¼┬Ø and taking advantage of extremely low borrowing costs as interest rates plunge to new record-lows on the Federal Reserve├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós pledge of another mortgage-bond-buying spree.

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The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) says its composite measurement of total mortgage application volume rose 2.8 percent last week when compared to the previous week, getting a boost from both refinance and home purchase activity.

MBA├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós Refinance Index increased 3 percent for the week ending September 21 to hit its highest level in six weeks. At the same time, the Purchase Index rose 1 percent.

The refinance share of mortgage activity increased to 81.2 percent of total applications, up slightly from 81.0 percent the week prior. MBA says it├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós the highest refinance share recorded in its weekly survey since early August.

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All fixed-rate loan products posted their lowest average rates in the history of MBA├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós survey last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $417,500 or less decreased from 3.72 percent to 3.63 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances greater than $417,500 dropped to 3.87 percent. The week before, the average 30-year jumbo rate was 3.99 percent.

The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration (FHA) decreased to 3.44 percent last week. It fell 6 basis points from 3.50 percent the week before.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.98 percent last week, down from 3.03 percent the previous week.

The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) remained unchanged in MBA├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós study at 2.61 percent, matching its survey record-low.

With mortgage rates resuming their fall nearly across-the-board, housing affordability remains extremely high even as home values head higher across much of the country.

""Standard & Poor├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós reported Tuesday"":https://themreport.com/articles/case-shiller-price-indexes-at-20-month-high-2012-09-25 that both the 10-city and 20-city composite readings of its Case-Shiller home price indices rose in July to their highest levels in more than a year-and-a-half.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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