It was a good week for home purchase applications as refinance apps fell for a fifth straight week, according to the Mortgage Bankers Association.
Overall, mortgage application volume decreased 0.2 percent on a seasonally adjusted basis for the week ending October 1.
The refinance index slipped 2.5 percent from the previous week and the seasonally adjusted purchase index jumped 9.3 percent to the highest level since the week ending May 7.
The unadjusted purchase index was up 9.1 percent compared with the previous week, but still 34.7 percent lower than the same week a year ago.
“The increase in purchase activity was led by a 17.2 percent increase in FHA applications, while conventional purchase applications also increased by 3.6 percent,” said Jay Brinkmann, MBA’s Chief Economist, in a release.
“This is the second straight weekly increase in purchase applications and the highest Purchase Index level since the expiration of the homebuyer tax credit program.
Brinkmann noted that FHA loan apps may have jumped as borrowers rushed to get applications in before the new FHA requirements took effect on October 4th, which include higher credit score and down payment requirements.
The increase in purchase activity pushed the refinance share of mortgage activity to 78.9 percent of total applications from 80.7 percent the previous week.
Mortgage Rates Hit New Record Lows
Meanwhile, the popular 30-year fixed-rate mortgage hit a new record low 4.25 percent, down from 4.38 percent a week earlier.
The 15-year fixed also hit a record low, falling to 3.73 percent from 3.77 percent.
Finally, the one-year adjustable-rate mortgage increased to 7.11 percent from 7.04 percent.
The mortgage rates are good for mortgages at 80 percent loan-to-value – pricing adjustmentscan lower or raise your actual interest rate.
Keep in mind the MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely increased since the mortgage crisis got underway a few years back.