NEW YORK - Mortgage loan application volume surged 14.6% on a seasonally adjusted basis from one week earlier as refinancings jumped 21.0%, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey for the week ending October 8, which was released Wednesday.
The purchase index fell 8.5% in the week.
"After five weeks of steadily declining rates to yet another new low, borrowers who had been on the fence jumped off, which factored into refinance activity surging more than 20%," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Refinance application volumes are now close to the highest level this year. Purchase activity remains generally weak, but applications for conventional purchase mortgages are now at their highest level since the beginning of May following the expiration of the tax credit."
"Last week saw a big jump in applications for FHA loans to purchase homes. We surmised that this was due to potential buyers wanting to beat the stricter FHA standards that went into effect October 4th. This conjecture was confirmed by the fact that this week FHA applications fell back to a level closer to the average seen over the past four months, "continued Fratantoni.
The market index four-week moving average rose 3.0%, while the purchase index four-week moving average dropped 0.3%, and the refinance index four-week moving average increased 3.9%.
Refinancings accounted for 83.1% of applications in the week, up from 78.9%, while adjustable-rate mortgages accounted for 5.4% of volume, down from 6.1% the previous week.
The average interest rate for a 30-year fixed-rate mortgage fell to 4.21% from 4.25%, while 15-year fixed-rate mortgages averaged 3.62% after 3.73% last week, and one-year ARMs slid to 7.03% from 7.11%.
