Mortgage applications rose 2.9% from a week earlier, and rose for the first time in almost a month, with home buying demand remaining unusually high towards the end of the summer, according to the Mortgage Bankers Association.
"Purchase requests were 40% higher than the same week last year, but the increase is higher compared to Labor Day 2019," said Joel Kan, vice president of economic and industrial forecasting for the MBA, in a press release. "Even so, there is still some resilience to the buy market. Applications rose nearly 3% weekly and the average loan size continued to grow, reaching a survey high of $ 368,600."
"Given the strong general demand for home purchases, conventional, VA, and FHA purchase applications have increased over the past week," Kan added.
The MBA's weekly mortgage application survey for the week ending September 4, 2020 found the refinancing index up 3% from the previous week and up 60% from the previous week, including the Labor Day holidays.
The refinancing share of mortgage activity rose from 62.5% in the previous week to 63.1% of total applications.
"Mortgage rates fell last week, with the 15-year fixed rate falling 5 basis points to a new record low of 2.62%," Kan said. "The fall in interest rates led to a recovery in refinancing activity, largely driven by borrowers applying for conventional loans."
The seasonally adjusted purchasing index rose 3% from a week earlier, while the unadjusted purchasing index rose 0.2% from the previous week.
The variable rate mortgage activity decreased from 2.6% to 2.2%, while the proportion of loan applications insured by the Federal Housing Administration remained unchanged (up from 10.2% the week before).
The rate of veteran affairs loan applications decreased from 11.4% to 11.2% and the US Department of Agriculture / Rural Development rate was unchanged from 0.6% the week before.
The average contract rate for 30 year fixed rate mortgages with compliant loan balances ($ 510,400 or less) decreased 1 basis point to 3.07%. On 30-year fixed rate mortgages with jumbo loan balances (over $ 510,400), the average contract rate decreased 1 basis point to 3.4%.
The average contract rate for 30-year fixed rate mortgages backed by the FHA decreased 3 basis points to 3.16%. For 15-year fixed-rate mortgages, the average decreased 5 basis points to 2.62%. The average contract rate for 5/1 ARM decreased from 3.08% to 2.99%.