The seasonally adjusted purchase index decreased 5% compared to the week ended October 10th. On an unadjusted basis, the composite index increased by 12% week-over-week. The unadjusted purchase index fell by 5% for the week, and remains 9% lower year-over-year.
Adjustable rate mortgage loans accounted for 9.4% of all applications, up from 8% in the prior week, and the highest percentage since June of 2008.
The MBA’s refinance index increased by 23%, after rising by 11% in the previous week. The share of refinancings increased from 59% of all applications to 65%, the highest level since last December.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.20% to 4.10%, the lowest rate since May of 2013. The rate for a jumbo 30-year fixed-rate mortgage dropped from 4.14% to 4.03%, also the lowest since May 2013. The average interest rate for a 15-year fixed-rate mortgage declined from 3.41% to 3.28%, again the lowest rate since May 2013.
The contract interest rate for a 5/1 adjustable rate mortgage loan declined from 3.05% to 2.94%, the lowest rate since June 2013. Rates on a 30-year FHA-backed fixed rate loan dropped from 3.90% to 3.81%, once more the lowest since June 2013.
The MBA’s chief economist said:
Continuing concerns about weak economic growth in Europe and a few US economic indicators that came in below expectations caused a flight to quality into US Treasuries last week, leading to sharp drops in interest rates. Mortgage rates have fallen close to 30 basis points over the last four weeks. Refinance application volume reached the highest level since November 2013 as a result, and the average loan balance for refinance applications increased to $306,400, the highest level in the survey’s history.
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