Consumers appear to be showing a renewed interest in actually buying a home — as opposed to refinancing — according to new weekly application figures compiled by the Mortgage Bankers Association.
MBA reported that on a seasonally adjusted basis, purchase apps had their best week since early May, jumping 9.3% on a sequential basis.
For the week ending October 1, the refi share of applications fell to 78.9%, compared to 80.7% the week prior.
Overall, applications fell 0.2% on a seasonally adjusted basis. (On an unadjusted basis, applications rose 9% from the previous week but were off 35% compared to the same period a year ago.)
MBA chief economist Jay Brinkmann said a 17% increase in FHA application activity and a 3.6% jump in conventional purchase apps contributed to the overall surge in the purchase market.
He said borrowers rushing to get applications in ahead of new, tighter FHA requirements that took effect Oct. 4 may have contributed to the spike in purchase application activity. New FHA rules require somewhat higher credit scores and downpayments, something certain borrowers may have wished to avoid.
Adjustable-rate mortgage applications accounted for just 6.1% of all new business, essentially flat from the prior week.
The average contract interest rate for one-year ARMs was up slightly at 7.11% from 7.04% the week before, according to the MBA. The rate for 30-year fixed-rate mortgages fell to 4.25% from 4.38% the previous week and the average 15-year FRM rate dropped to 3.73% from 3.77%.
