Mortgage Applications Leap as Government Crisis Ends

After staying mostly flat through mid-October, mortgage application volume jumped for the week ending October 25, the ""Mortgage Bankers Association"":http://mba.org/default.htm (MBA) found in its Weekly Mortgage Applications Survey.

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MBA's Market Composite Index, a measure of loan application volume, increased 6.4 percent on a seasonally [COLUMN_BREAK]

adjusted basis from the prior week. Unadjusted, the index rose an even 6 percent.

Having experienced a shaky summer, the Refinance Index bumped up 9 percent week-over-week. The refinance share of mortgage activity increased to 67 percent of total applications, the highest share since June.

The Purchase Index also rose, though at a slower pace. Both adjusted and unadjusted, the index was up 2 percent compared to the previous week, with the unadjusted figure coming it 0.1 percent lower than the same week one year ago.

As applications increased, mortgage rates took a sizable dive, even as the country breathed a sigh of relief following the end of the government shutdown. The average contract interest rate for a 30-year fixed-rate mortgage was 4.33 percent, down from 4.39 percent and the lowest rate recorded by MBA since June. Points decreased to 0.26 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio loans.