Home purchase application activity continued to increase this week in the wake of the Fed’s milestone 50-basis point rate cut last week. 

The latest Weekly Applications Survey the Mortgage Bankers Association’s (MBA) for the week ending September 20, 2024 shows mortgage applications increasing 11.0% from one week earlier, to a 2-year high and their fifth consecutive week of increases, with refinance activity driving the majority of applications.   The data is tracked through MBA’s Market Composite Index, a measure of mortgage loan application volume, which showed an 11.0% increase on a seasonally adjusted basis from one week earlier.

The Refinance Index also increased, up 20% from the previous week and was a notable 175% higher than the same week one year ago, MBA reported. The refinance share of mortgage activity increased to 55.7% of total applications from 51.2% the previous week, MBA data showed.

“Mortgage applications increased to their highest level since July 2022, boosted by a 20% increase in refinance applications after a large increase the prior week,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed rate decreased for the eighth straight week to 6.13%, while the FHA rate decreased to 5.99%, breaking the psychologically important 6 percent level.

“As a result of lower rates, week-over-week gains for both conventional and government refinance applications increased sharply,” Kan continued. “The refinance share of applications is now at 55.7%, and while the level of refinance activity is still modest compared to prior refi waves, they now account for the majority of applications, given the seasonal slowdown in purchase activity.”

Added Kan, “Average loan sizes were higher both for purchase and refinance applications, which pushed the overall average loan size to its highest in the survey’s history at $413,100.”

Here are the additional stats from MBA’s weekly report this week: 

• The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.9% of total applications.
• The FHA share of total applications decreased to 15.0% from 15.2% the week prior. 
• The VA share of total applications increased to 18.3% from 16.8% the week prior. 
• The USDA share of total applications decreased to 0.3% from 0.4% the week prior.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.13% from 6.15%, with points increasing to 0.57 from 0.56 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 6.47% from 6.41%, with points decreasing to 0.50 from 0.55 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.  
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 5.99% from 6.12%, with points decreasing to 0.79 from 0.81 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages increased to 5.47% from 5.42%, with points decreasing to 0.52 from 0.70 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
• The average contract interest rate for 5/1 ARMs increased to 5.76% from 5.66%, with points decreasing to 0.44 from 0.49 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 

For the full report, click here.

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