Home purchase applications edged up for the third straight week, increasing 1.4% from last week’s increase of 1.6%, as mortgage rates hit their lowest level in six weeks and a 25-basis point interest rate cut by the Federal Reserve is likely in the offing.
This week’s latest mortgage application data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey also shows ongoing high activity on the Refinance Index, marking 106% higher activity this week over this time last year.
Here are the latest stats for the week ending September 6, 2024, which also include an adjustment for the Labor Day Holiday.
The numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 1.4% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 10% compared with the previous week.
- The Refinance Index increased 1% from the previous week and was 106% higher than the same week one year ago.
- The seasonally adjusted Purchase Index increased 2% from one week earlier.
- The unadjusted Purchase Index decreased 10% compared with the previous week and was 3% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 46.7% of total applications from 46.4% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 5.4% of total applications.
- The FHA share of total applications increased to 14.7% from 14.6% the week prior.
- The VA share of total applications decreased to 16.4% from 16.7% the week prior.
- The USDA share of total applications remained unchanged at 0.4% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.29% from 6.43%, with points decreasing to 0.55 from 0.56 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 6.56% from 6.73%, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.24% from 6.30%, with points decreasing to 0.76 from 0.80 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.71% from 5.98%, with points increasing to 0.73 from 0.64 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 5.85% from 5.98%, with points decreasing to 0.29 from 0.76 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
MBA’s take:
“Mortgage rates declined for the sixth consecutive week, with the 30-year fixed rate decreasing to 6.29%, the lowest rate since February 2023. Treasury yields have been responding to data showing a picture of cooling inflation, a slowing job market, and the anticipated first rate cut from the Federal Reserve later this month,” said Joel Kan, MBA’s vice president and deputy chief economist. “With rates almost a full percentage point lower than a year ago, refinance applications continue to run much higher than last year’s pace. However, there is still somewhat limited refinance potential as many borrowers still have sub-5% rates. It is a positive development that there are homeowners who can benefit from a refinance as rates continue to move lower.”
Added Kan, “Purchase applications increased over the week and are edging closer to last year’s levels. Despite the drop in rates, affordability challenges and other factors such as limited inventory might still be hindering purchase decisions.”
