Mortgage applications increase for just second time in two months

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Mortgage applications were up 1.6% from one week earlier, marking only the second increase of the past two months despite key interest rates rising, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending Sept. 14 found that the refinance index increased 4% from the previous week. Last week's results included an adjustment for the Labor Day holiday.

The refinance share of application activity increased to 39% from 37.8% the previous week.

"In the first full week following Labor Day, applications bounced back," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Purchase applications slowed earlier in the summer, but have shown year-over-year increases for the past five weeks."

Kan also noted a 3.7% increase in refinance applications, despite the 30-year fixed rate increase. "As markets received various pieces of data indicating economic strength such as wage growth, inflation and jobless claims, Treasury rates were up over the week," he said.

The seasonally adjusted purchase index increased 0.3% from one week earlier. The unadjusted purchase index increased 9% compared with the previous week and was 4% higher than the same week one year ago.

Adjustable-rate loan activity increased to 6.5% from 6.4% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 10.6% from 10.4% the week prior.

The share of applications for Veterans Affairs-guaranteed loans decreased to 10% from 10.5% and the U.S. Department of Agriculture/Rural Development share decreased to 0.7% from 0.8% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 4 basis points to 4.88%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 5 basis points to 4.77%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 6 basis points to 4.9%, while for 15-year fixed-rate mortgages the average increased 2 basis points to 4.3%.

The average contract interest rate for 5/1 ARMs increased to 4.17% from 4.07%.

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Mortgage applications Refinance Purchase Mortgage rates Mortgage Bankers Association FHA The VA