Rate Decreases in U.S. Drive Mortgage Applications Increase

---

According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 18, 2015, mortgage applications increased 13.9 percent from one week earlier. The previous week's results included an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 13.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 26 percent compared with the previous week.

The Refinance Index increased 18 percent from the previous week. The seasonally adjusted Purchase Index increased 9 percent from one week earlier to its highest level since June 2015. The unadjusted Purchase Index increased 20 percent compared with the previous week and was 27 percent higher than the same week one year ago.

"We saw significant rate volatility last week surrounding the FOMC meeting, and rate declines toward the end of the week likely drove applications from both prospective home buyers and borrowers looking to refinance. The 30-year fixed rate remained unchanged over the week even though there was substantial intra-week fluctuation, but we saw rate decreases in other loan products like the 15-year fixed, 5/1 ARM, and 30-year jumbo," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity increased to 58.4 percent of total applications from 56.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.9 percent of total applications.

The FHA share of total applications decreased to 12.9 percent from 14.2 percent the week prior. The VA share of total applications decreased to 10.0 percent from 10.7 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.09 percent, with points increasing to 0.45 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged 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, with points increasing to 0.36 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.88 percent, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.31 percent from 3.33 percent, with points increasing to 0.42 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.95 percent, its lowest level since May 2015, from 3.04 percent, with points increasing to 0.58 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.