U.S. Mortgage Applications Spike 25 Percent in a Single Week

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending October 2, 2015, mortgage applications increased 25.5 percent from one week earlier.

The Market Composite Index, a measure of mortgage loan application volume, increased 25.5 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 24 percent from the previous week. The seasonally adjusted Purchase Index increased 27 percent from one week earlier. The unadjusted Purchase Index increased 27 percent compared with the previous week and was 49 percent higher than the same week one year ago.

"The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change. The average loan size of applications in the weekly survey increased by 6.9 percent, driven by a 12.1 percent increase in the average size of refinances," said Lynn Fisher, MBA's Vice President of Research and Economics.

The refinance share of mortgage activity decreased to 57.4 percent of total applications from 58.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.6 percent of total applications.

The FHA share of total applications decreased to 12.7 percent from 13.8 percent the week prior. The VA share of total applications decreased to 9.2 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.99 percent, the lowest level since May 2015, from 4.08 percent, with points increasing to 0.46 from 0.45 (including the origination fee) for 80 percent 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 $417,000) decreased to 3.89 percent, the lowest level since April 2015, from 3.96 percent, with points decreasing to 0.25 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 30-year fixed-rate mortgages backed by the FHA decreased to 3.80 percent, the lowest level since May 2015, from 3.87 percent, with points increasing to 0.35 from 0.34 (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 3.24 percent, the lowest level since May 2015, from 3.29 percent, with points decreasing to 0.38 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.96 percent from 2.95 percent, with points decreasing to 0.32 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.