Applications for both refinancing and home purchase increased last week as mortgage interest rates retreated.  The Mortgage Bankers Association (MBA) said that its Market Composite Index, a measure of overall mortgage application volume, increased 5.5 percent on a seasonally adjusted basis during the week ended September 20 and increased 5.0 percent unadjusted.  MBA also reported that contract interest rates fell between 13 and 18 basis points for the various products tracked in its Weekly Mortgage Applications Survey.  Effective rates were down for all products as well.

The seasonally adjusted Purchase Index was 7 percent higher than during the week ended September 13 and the unadjusted version increased 5 percent from the previous week and was up 7 percent from the level a year earlier.  It was the most active week for purchase applications since July but the government share of that business decreased to 28.4 percent from 29.9 percent, the lowest level since early August and close to the series low of 28.2 percent in June 2013.  

The Refinance Index increased 5 percent from the previous week and refinancing maintained the same 61 percent share of the market it had the week before.  Applications for refinancing through the Home Affordable Refinancing Program represented a 41 percent share of all refinancing applications, up from 40 percent the previous week and the highest portion since MBA began tracking the program in early 2012.  

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $417,000 was down to 4.62 percent with 0.41 point from 4.75 percent with 0.39 point.  The jumbo 30-year FRM (balances over $417,000) fell from 4.83 percent to 4.66 percent and points decreased from 0.33 to 0.29.

Thirty-year FRM with a FHA guarantee had an average contract rate of 4.32 percent with 0.37 point.  During the previous week the average rate was 4.50 percent with 0.41 point.

The rate for a 15-year FRM was down 18 basis point from the previous week to an average of 3.68 percent.  Points decreased to 0.28 from 0.34.

Adjustable rate mortgages (ARM) had a 7 percent share of applications, unchanged from the previous week.  The average rate for the 5/1 ARM dropped from 3.54 percent with 0.43 point to 3.39 percent with 0.35 point. 

All interest rates are for loans with an 80 percent loan-to-value ratio.  Points include the origination fee.

MBA's weekly survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.