Demand for mortgages was up headed into last week’s holiday as purchase and refi rates continued to fall. According to the Mortgage Bankers Association, the Market Composite Index, a measure of mortgage loan application volume, increased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10 percent compared with the previous week.
The Refinance Index increased 2 percent from the previous wee, but was86 percent lower than the same week one year ago.
The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 41 percent lower than the same week one year ago.
“The 30-year fixed-rate mortgage fell for the second week in a row to 6.67 percent and is now down almost 50 basis points from the recent peak of 7.16 percent one month ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year. As a result of the drop in mortgage rates, both purchase and refinance applications picked up slightly last week. However, refinance activity is still more than 80 percent below last year’s pace.”
The refinance share of mortgage activity increased to 28.4 percent of total applications from 27.6 percent the previous week. The adjustable-rate mortgage share of activity decreased to 8.8 percent of total applications.