Mortgage application volume for the period ending Jan. 16 reached its highest level since June 2013, led by a 22% increase in refinance applications, according to data from the Mortgage Bankers Association.
The MBA's market composite index was up 14.2% on a seasonally-adjusted basis from one week earlier. During the
The latest weekly increase was largely due to mortgage rates falling to their lowest level in 20 months, said Mike Fratantoni, chief economist for the Washington-based trade group.
The average contract interest rate for 30-year fixed mortgages with conforming loan balances below $417,000 plunged nine basis points, to 3.8%. Jumbo loans above $417,000 saw the average 30-year fixed rate decrease two basis points, to 3.86%. Additionally, mortgages backed by the Federal Housing Administration fell five basis points, to 3.66%. Meanwhile, the average contract interest rate for 15-year fixed mortgages dropped six basis points, to 3.1%
Loan applications are now also rising because of President Obama's announcement earlier this month to
FHA refinance applications elevated 57% from the previous week. But even with this increase, refinances accounted for only 48% of FHA volume, compared to 73% for Veterans Affairs loans, and 77% for conventional loans.
The refinance share of mortgage activity represented 74% of total applications for the weekly time period. The adjustable-rate mortgage share was 6.4%, the FHA share of applications was 8%, VA loans accounted for 9.4% of all activity, and the USDA volume was 0.6%, the MBA said.
