Low rates are attracting both purchase and refinance applications as both components in this week's Mortgage Bankers Association Market Composite Index, a measure of mortgage application activity, have increased over the previous week.
For the period ended July 30, the Index increased 1.3% on a seasonally adjusted basis and 1.4% on an unadjusted basis when compared with the previous week.
A 1.5% increase in the seasonally adjusted purchase index (making it three weeks in a row of increases) was once again driven by government purchase applications which increased 3.4 percent from last week, while conventional purchase applications were essentially flat.
In the past four weeks, the unadjusted purchase index has increased 7.1%, but is down nearly 34% from one year ago.
The Refinance Index increased 1.3% from the previous week, while the share of refinance applications was the same as one week ago at 78%. The adjustable-rate mortgage share of activity fell to 5.4% from 5.7% over the same time frame.
The average contract interest rate for the 30-year fixed rate mortgage decreased by nine basis points to 4.60% from 4.69% for the preceeding week with points increasing to 0.93 from 0.88 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported.
Setting a new record low, the average contract interest rate for 15-year FRMs fell by 9 bps during the week to 4.03% from 4.12%, with points increasing to 1.01 from 0.83.
The average contract interest rate for one-year ARMs fell 5 bps to 7.10%.
