According to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey, the number of applications for mortgages increased by 5.3 percent from last week.
The increase is reportedly due to a 17.6 percent growth in government purchase applications. The Market Composite Index, which is used to measure the mortgage loan application volume, went up 5.3 percent on a seasonally adjusted basis from the previous week. The index also rose 5.9 percent from the previous week, on an unadjusted basis. Applications the refinance index also increased 2.7 percent.
“Purchase application volume jumped last week largely due to another sharp increase in applications for government loans. Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Refinance activity increased somewhat, as rates dropped to their lowest level in a month towards the end of the week.”
The refinance share of the recent mortgage activity is the lowest it has been since May 2010. The number of applications decreased to 58.5 percent from 60.3 the previous week. Meanwhile the adjustable-rate mortgage (ARM) share went up to 6.5 percent from 5.9 percent.
There was decrease in the average contract interest rate for 30-year fixed-rate mortgages just last week; the rate went from 4.98 percent to 4.83 percent. The rate for 15-year fixed-rate mortgages also decreased to 4.07 percent from 4.17 percent.