Home purchase loan applications are at their highest level since July, up 7% on a seasonally adjusted for the week ended Sept. 20, according to the Mortgage Bankers Association. This occurred as rates fell following the Federal Reserve’s no taper announcement.
Total application volume increased 5.5% in mortgage application volume on a seasonally adjusted basis. On an unadjusted basis, purchase application activity is 7% higher compared with the same week in 2012.
However, the MBA noted the share of purchase applications for government loan products decreased to 28.4% from 29.9%, the lowest level since early August and close to the series low of 28.2% recorded in June 2013. This took place even as the MBA found the average rate for Federal Housing Administration-insured loans fell 18 basis points during the time period.
Refinance applications, reported on an unadjusted basis, were 5% higher than the previous week. The share of refi apps remained at 61%, after bottoming at 57% two weeks ago. The subset of Home Affordable Refinance Program applications for the week was up one percentage point to 41%, the highest since MBA started tracking this area in 2012.
Zillow Mortgage Marketplace’s rate tracker finds the 30-year fixed mortgage rate falling compared to the past week by 21 basis points to 4.17% as of Tuesday afternoon. After the Fed announcement last Wednesday, Zillow’s data had the 30-year FRM falling to 4.24%.
In the near term going forward said Erin Lantz, director of mortgages at Zillow, “We expect rates to remain fairly flat as markets continue to digest the Fed’s announcement and look for particularly strong or surprisingly weak economic data before making major changes.”
According to the MBA application survey, the average contract rate for the 30-year conforming FRM (MBA defines this as a loan with a balance of $417,500 or under) for the survey period is 4.62%, down 13 basis points from the previous week. Federal Housing Administration-insured loans had an average contract rate for the week of 4.32%, a decrease of 18 basis points from the previous week.
Jumbo 30-year FRMs saw the average contract fell by 17 basis points to 4.66%. The MBA said the rate for the 15-year FRM decreased 13 basis points to 3.68%.
The average contract rate for the 5/1 adjustable-rate mortgage decreased 15 basis points to 3.39%.