Mortgage applications up, led by purchase activity, in short week

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Mortgage applications increased 2% on an adjusted basis from one week earlier driven by gains in the purchase market while refinance activity was flat, according to the Mortgage Bankers Association. This week's results include an adjustment for the Labor Day holiday.

The MBA's Weekly Mortgage Applications Survey for the week ending Sept. 6 found that the refinance index increased 0.4% from the previous week and was 169% higher than the same week one year ago.

"Mortgages rates continued to decline over the holiday-shortened week, with the 30-year fixed-rate decreasing 5 basis points and remaining near three-year lows," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Refinances were essentially unchanged, up just 0.4%, but August overall was the strongest month of activity so far in 2019.

"Purchase applications rose around 5%, with increases for both conventional and government applications. Purchase activity was 9% higher than last year, continuing the trend seen most of the year of solid year-over-year gains," he continued.

The week-to-week change in purchase activity was reported on an adjusted basis, but the comparison to one year prior is unadjusted.

The refinance share of mortgage activity decreased to 60% of total applications from 60.4% the previous week.

Adjustable-rate mortgage activity decreased to 5.6% from 5.7% of total applications and the share of Federal Housing Administration-insured loan applications decreased to 9.3% from 10.2% the week prior.

The share of applications for Veterans Affairs-guaranteed loans increased to 11.9% from 11.3% and the U.S. Department of Agriculture/Rural Development share decreased to 0.5% from 0.6% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased 5 basis points to 3.82%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate decreased 10 basis points to 3.84%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 4 basis points to 3.76%. For 15-year fixed-rate mortgages, the average decreased 1 basis point to 3.28%. The average contract interest rate for 5/1 ARMs increased 2 basis points to 3.42%.

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