Mortgage applications gained 5.1% last week as mortgage rates continue to hit record lows, according to a report by the Mortgage Bankers Association.
The refinance index also increased 12% from the previous week – marking the highest level in refinance activity in over a month and a 107% gain year-over-year.
The 30-year fixed-rate fell seven basis points to 3.19% – another record low in MBA’s survey. Last week’s fixed-rate also sat 63 basis points lower than when refinances hit a high in late March, leaving lenders to grapple with capacity issues, according to the report.
“The drop in rates led to a jump in refinance activity, with refinance loan balances also climbing to a high last seen in March,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic, purchase applications saw the eighth consecutive week of year-over-year increases. However, this marked a 6% decrease from the week prior, Kan said.
The Market Composite Index, a measure of mortgage loan application volume, also increased 5.1% on a seasonally adjusted basis from one week earlier.
As the refinance index gained, refinance’s share of mortgage activity also increased to 64.2% of total applications from 60.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3% of total applications from 3.4% the week prior.
Here is a more detailed breakdown of this week’s mortgage application data:
- The FHA’s share of mortgage apps increased to 11.1% from 10.9%
- The VA share of applications increased to 11% from 10.4%
- The USDA share of total applications fell from 0.7% to 0.6%
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell from 3.26% to 3.19%
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.53% from 3.52%
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell from 3.31% to 3.24%
- The average contract interest rate for 15-year fixed-rate mortgages fell from 2.77% to 2.7%
- The average contract interest rate for 5/1 ARMs increased to 3% from 2.98%