Led by a jump in home refinances, mortgage applications rose last week as refinancing grew by 2.2% from a week earlier, according to the Mortgage Bankers Association. Homeowners turned out in larger numbers to refinance their mortgages at near record low mortgage rates.
However, applications for new home mortgages on purchases dropped as consumer confidence remains weak amid a hurting economy and a sluggish housing market. The average fully executed 30-year fixed rate mortgage remained unchanged from a week earlier at 4.29% with 0.41 points.
The fixed 15-year rate loan dropped to 3.46% from 3.52% for the week on an 80% loan-to-value mortgage with 0.45 points.
The investors share of applications for home purchases was 5.7% during August, led by a higher share of purchases in the Western region of the U.S. Adjustable rate mortgages dropped to 2.96% on the five-year ARM, but still make up only a small percentage of home mortgages.
Seasonally adjusted purchase applications fell 4.7% from the previous week, and the four week moving average is down 3.15%. The refinance share of mortgage activity increased to 78.3% of all mortgage applications counted in the Mortgage Bankers Association survey, which now accounts for three-quarters of all applications taken by mortgage bankers, commercial banks and thrifts. It’s the first week that the survey includes commercial banks and thrifts.
This week’s survey is based on an enhanced sample, capturing 75% of all retail and consumer direct channel mortgage applications compared to the previous 50% sampling. MBA has tracked the old sample with the new sample since early January to ensure the new data is comparable.