WASHINGTON–With the interest rate on the 30-year fixed-rate mortgage hitting a 13-month of 6.30% in the week ended Oct. 24, the Mortgage Bankers Association is reporting that its weekly applications index rose 7.1% last week to 338.7, led by a 9.3% increase in applications to refinance existing loans.
Applications for loans to purchase a property rose 4.5%.
The volume came ahead of this week’s move by the Fed to lower its benchmark rate by 25 basis points to a range of 3.75% to 4.00%, with another such reduction is expected at its final meeting of the year in December.
Decline in 10-Year Treasury
The yield on the 10-year U.S. Treasury note, the government security most influential to mortgage rates, has declined for four weeks in a row and is near its lowest since early April.
The MBA’s Refinance Index increased 9% from the previous week and was 111% higher than the same week a year ago. The seasonally adjusted Purchase Index increased 5% from one week earlier. The unadjusted Purchase Index increased 4% compared to the prior week and was 20% higher than the same week one year ago, the MBA said.
Additional Data Points
The MBA further reported that its most recent survey reveals:
- The refinance share of mortgage activity increased to 57.1% of total applications from 55.9% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 8.9% of total applications.
- The Federal Housing Administration (FHA) share of total applications decreased to 20.5% from 21.8% the week prior. FHA loans are still being processed during the government shutdown, but applicants can expect delays in processing and closings.
- The Veterans Affairs share of total applications decreased to 13.4% from 13.5% the week prior. The USDA share of total applications decreased to 0.2% from 0.3% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.30% from 6.37%, with points decreasing to 0.58 from 0.59 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
