United States mortgage applications jump in latest week-MBA

Also, mortgage activity increased from 56.2 percent last week to 58.4 percent this week with the adjusted-rate mortgage portion of this activity reaching 6.9 percent of all applications.

An uptick in the number of application for refinancing or purchasing might be seen this month prior to the next Federal Reserve meeting in October as the central bank could decide to raise it lending rate and cause mortgage rates in turn to increase as well. The Refinance Index increased 18% from the previous week.

The MBA’s seasonally adjusted index of refinancing applications rose 17.7 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 9.1 percent to its highest level since June.

On an unadjusted basis, purchases increased 20% compared with the previous week and were 27% higher than the same week one year ago. But there was rate decreases in other loan products, such as the 15-year fixed, 5/1 ARM, and 30-year jumbo.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage remained unchanged last week at 4.09%.

Looking at application volume by loan type, the FHA’s share of total applications was 12.9%, down from 14.2% the week prior. In addition, a slight drop in mortgage interest rates helped boost applications for refinances. The U.S. Department of Agriculture’s share of total applications was 0.7%, down from 0.8% the previous week.

Overall, loans backed by the Federal Housing Administration, Veterans Administration or federal farm programs accounted for 38 percent of all new mortgages in 2014, down from the peak of 54 percent in 2009. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.99 percent, its lowest level since May 2015, from 4.04 percent, for 80 percent LTV loans. The effective rate increased from last week.

The average rate for a 5/1 ARM was 2.95%, down from 3.04%.