Mortgage applications increased 7.2% from one week earlier as consumers reacted to falling interest rates related to news regarding the coronavirus, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Jan. 24 found that the refinance index increased 8%
The refinance share of mortgage activity decreased to 60.4% of total applications from 61.6% the previous week.
"Mortgage applications continued their strong start to the year, as borrowers acted on the drop in mortgage rates last week. Rates were driven lower by
"With the 30-year fixed rate at its lowest level since November 2016, refinances jumped 7.5%. Thanks to low rates and the healthy job market, purchase activity continues to run stronger than in 2019."
The seasonally adjusted purchase index increased 5% from one week earlier, while the unadjusted purchase index increased 2% compared with the previous week and was 17% higher than the same week one year ago.
And mortgage rates may not yet be done moving lower. Yields on the 10-year Treasury, the benchmark for 30-year FRMs, fell from 1.77% on Jan. 22 to as low as 1.61% during the morning of Jan. 29.
Adjustable-rate mortgage of activity increased to 4.7% from 4.6% of total applications, while the share of Federal Housing Administration-insured loan applications decreased to 10.7% from 11.3% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 11.7% from 13.8% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased 6 basis points to 3.81%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate decreased 9 basis points to 3.78%.
However, rates for the FHA-insured 30-year loan bucked the trend; the average contract interest rate for these mortgages increased 4 basis points to 3.82%. For 15-year fixed-rate mortgages, the average decreased 1 basis point to 3.24%. The average contract interest rate for 5/1 ARMs decreased to 3.15% from 3.29%.