Mortgage applications are up 6.8%, with refinance activity leading the way

Mortgage applications were up 6.8% last week, according to a report from the Mortgage Bankers Association, further evidence that August is the new May for home-buying.

Consumers responded to mortgage rates that fell to a new low last week, with the refinance index jumping 9% from the previous week to its highest level since April, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Last week, refinance activity also boasted its twelfth straight week of year-over-year gains and rose to 65.7% share of total applications for mortgage activity, the highest level since May.

The unadjusted Purchase Index increased 1% compared with the previous week and was 22% higher than the same week one year ago.

“While this was still positive news for the purchase market, the gradual slowdown in the improvement in the job market and tight housing inventory remain a concern for the coming months, even as low mortgage rates continue to provide support.”

The adjustable-rate mortgage (ARM) share of activity fell last week to 2.7% of total applications from 3.1%.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The FHA’s share of mortgage apps increased from 9.6% to 10.4%
  • The VA share of applications increased from 11.2% to 11.4%.
  • The USDA share of total applications remained unchanged from 0.6% the week prior.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell to 3.06% from 3.14%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) fell to 3.40% from 3.51%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.23% from 3.27%.
  • The average contract interest rate for 15-year fixed-rate mortgages fell to 2.67% from 2.73%.
  • The average contract interest rate for 5/1 ARMs fell to 3% from 3.09%.

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