The seasonally adjusted purchase index decreased 5% from one week earlier. The unadjusted purchase index also decreased 5% compared with the previous week and was 20% higher than the same week one year ago.
“The lowest mortgage rates in a month spurred an increase in refinance activity, including another pickup in ARM applications. The 30-year fixed rate decreased to 6.37% and all other loan types also decreased,” said Joel Kan, MBA’s vice president and deputy chief economist. “The refinance index increased 4%, driven by a 6% increase in conventional refinances and a 12% increase in FHA refinance applications, as borrowers remain attentive to these opportunities to lower their monthly mortgage payment. VA refinances bucked the trend and were down 12%.
“ARM applications increased 16% over the week, which pushed the ARM share to 11%, with the ARM rate more than 80 basis points lower than the 30-year fixed rate. Purchase applications were down over the week but remained 20% higher than a year ago,” Kan added.
By product type, the Federal Housing Administration (FHA) share of total applications continued its upward trajectory, increasing to 21.8% of applications compared to 20.5% the week prior.
Meanwhile, the U.S. Department of Veterans Affairs (VA) share of total applications decreased to 13.5%, down from 14.9% the week prior, and the U.S. Department of Agriculture (USDA) share of total applications dropped from 0.4% to 0.3% during the week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased from 6.42% to 6.37%. Interest rates for 30-year fixed mortgages with jumbo loan balances decreased from 6.47% to 6.39%.
FHA mortgage rates also moved lower, down 7 basis points to 6.12%, while rates for 15-year fixed mortgages were down 3 bps to 5.74%. The average rate for 5/1 ARMs dropped 8 bps to 5.55%.
