The continued decline in mortgage and refi rates has once again spurred more interest from buyers and homeowners, as application volumes increased for the fourth week in a row.
According to the Mortgage Bankers Association, the Market Composite Index, a measure of mortgage loan application volume, increased 2.9 percent on a seasonally adjusted basis from one week earlier. the Refinance Index increased five percent from the previous week and was 61 percent lower than the same week one year ago.
“Application activity increased as mortgage rates declined for the third straight week. The 30-year fixed rate declined to 6.45 percent, the lowest level in over a month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “While the 30-year fixed rate remained 1.65 percentage points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications. Home-price growth has slowed markedly in many parts of the country, which has helped to improve buyers’ purchasing power. Purchase applications remain over 30 percent behind last year’s pace, but recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.
“Refinance activity also picked up last week, but remains 61 percent below last year’s pace,” Kan added. “Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance.”
The refinance share of mortgage activity increased to 29.1 percent of total applications from 28.6 percent the previous week.