Following several weeks of drops, mortgage application volume pushed higher last week. The uptick was mostly due to an increase in refinancers who took advantage of lower mortgage rates.
Total mortgage application volume, which reflects refinance and home-buying activity, rose 3.3 percent week over week on a seasonally adjusted basis last week, the Mortgage Bankers Association reported Wednesday. However, volume remains 23 percent lower than a year ago.
Broken out, refinance volume moved 5 percent higher last week. Mortgage applications to purchase a home increased slightly, by 1 percent for the week. Applications for home purchases are now 5 percent higher than the same week one year ago.
The average contract interest rate for the 30-year fixed-rate mortgage fell to 4.06 percent, the lowest level since November 2016. The previous week the 30-year mortgage rate had averaged 4.11 percent.
"Heightened geopolitical tensions last week brought mortgage rates to their lowest level since the 2016 election," says Joel Kan, an MBA economist. "Refinance volume jumped as a result, and for the first time since January, the majority of application volume was for refinances, with the refinance share almost 51 percent."
The MBA also noted that Hurricane Harvey had an impact on application volume last week. Banks affected by the storm shut down all mortgage activity.
"Focusing in on Texas, unadjusted application volume was down 21.7 percent for purchase and 22.9 percent for refinances," Kan says.
Source: “Lower Mortgage Rates Push More Borrowers to Refinance, as Harvey Mucks up the Data,” CNBC (Sept. 6, 2017)
