Mortgage application volume jumped 16.6% in the week ended Sept. 28, as refinances skyrocketed as rates continued to set record lows, according to data from the Mortgage Bankers Association's weekly mortgage applications survey.
The refinance index increased 20%, to its highest level since April 2009. The seasonally adjusted purchase index rose 4%.
"Refinance application volume jumped to the highest level in more than three years last week as each of the five mortgage rates in MBA's survey dropped to new record lows in the survey," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Financial markets continue to adjust to QE3, as the ongoing presence of the Federal Reserve as a significant buyer of mortgage-backed securities applies downward pressure on rates. Although there was a slight decline in the HARP share of refinance activity, the level of HARP volume remains steady."
The refinance share of mortgage activity increased to 83% of total applications from 81% the previous week. The adjustable-rate mortgage (ARM) share of activity remained at 4% of applications.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.53% from 3.63%, while the average contract interest rate for 15-year fixed-rate mortgages decreased to 2.90% from 2.98%.