Mortgage Applications Increased 1.4 Percent From One Week Earlier

Mortgage applications increased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending September 6, 2024. This week’s results include an adjustment for the Labor Day Holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week and was 106 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 3 percent lower than the same week one year ago.

“Mortgage rates declined for the sixth consecutive week, with the 30-year fixed rate decreasing to 6.29 percent, 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 percent rates. It is a positive development that there are homeowners who can benefit from a refinance as rates continues 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.”

The refinance share of mortgage activity increased to 46.7 percent of total applications from 46.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications.

The FHA share of total applications increased to 14.7 percent from 14.6 percent the week prior. The VA share of total applications decreased to 16.4 percent from 16.7 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent 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 percent from 6.43 percent, with points decreasing to 0.55 from 0.56 (including the origination fee) for 80 percent 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 percent from 6.73 percent, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80 percent 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 percent from 6.30 percent, with points decreasing to 0.76 from 0.80 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.71 percent from 5.98 percent, with points increasing to 0.73 from 0.64 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 5.85 percent from 5.98 percent, with points decreasing to 0.29 from 0.76 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.