Mortgage loan applications rose 4.9% on a seasonally adjusted basis in the week ended August 20 as refinancing activity increased in response to historically low mortgage rates, the Mortgage Bankers Association reported Wednesday.
The refinance index climbed 5.7% in the week to its highest level since May 1, 2009. The seasonally adjusted purchase index rose 0.6%.
Michael Fratantoni, MBA’s vice president of research and economics, said refinancing application volume has risen 26% the past four weeks as mortgage rates have dropped to a record low for the association survey, which dates back to 1990.
Refinances accounted for 82.4% of total applications, up from 81.4% the previous week, while adjustable-rate mortgages totaled 5.8% of applications, up from 5.7% last week. The average 30-year fixed-rate mortgage decreased to 4.55% from 4.60%, the average 15-year fixed-rate mortgage fell to 3.91% from 3.99%, and a one-year ARM declined to 6.84% from 6.90%.
“We are at a new 15-month high for the refinance index,” Fratantoni said. “With rates this low, many borrowers who refinanced in the past two years may well have an incentive to refinance again.”
The four-week moving average for the seasonally adjusted market index grew 5.0%, the four-week moving average on the seasonally adjusted purchase index slid 0.3%, and the refinance index four-week moving average increased 6.2%.
