By Mike Colpitts
Pushed by lower mortgage rates, home purchase applications jumped as consumers came out in greater numbers to take advantage of near record low mortgage rates. Seasonally adjusted purchases rose 1.8% from a week ago, according to the Mortgage Bankers Association.
The refinance index, however, showed a slight two-tenths of a percent decline for the week. The four week moving average on the seasonally adjusted index is 2.5% lower led by a slowdown in refinancing. The Obama administration is expected to come out with details on its plan to refinance a larger share of home mortgages that are underwater by the middle of November.
Still, more than three out of four mortgage applications or 77.1% made during the week were for refinancing, which includes conventional and government backed mortgages.
The number of mortgage applications increased the most in the West, rising 7.5% in September, while the volume of purchase applications in the Mid-Atlantic region dropped the most, falling 1.9%. The number of refinances rose the most in the East North Central region.
Vermont saw the largest increase in refinance applications in September, but also experienced the largest decrease in purchase applications. On the opposite end of things, Wyoming had the largest increase in purchase applications for the month as home sales picked up moving into the colder winter season.
The average mortgage rate on a 30-year fixed-rate loan with conforming loan balances ($417,500 or less) decreased to 4.31% from 4.33% on fully executed contracts, with points increasing to 0.49 from 0.47 for 80 percent loan-to-value ratio mortgages.
The average contract mortgage rate on 15-year fixed-rate mortgages increased to 3.63%, a small increase from 3.62% a week earlier. The average rate for 5/1 ARMs dropped two basis points for the week to 3.09%.