Refinance applications continue to outgrow purchases

Mortgage applications rose 3.8% this week as rates for 15-year fixed-rate loans, FHA loans and jumbo loans all fell to new record lows, according to the Mortgage Bankers Association.

Mortgage loan application volume was up 3.8% on a seasonally adjusted basis from the previous week, according to MBA’s Market Composite Index. Unadjusted, the index climbed 3% week over week.

Joel Kan, MBA’s associate vice president of economic and industry forecasting, said that the decline in rates continued to drive the demand for refinances.

“(Refinancing) activity increased over 6%, with borrowers notably seeking conventional and government loans,” he said. “After a solid stretch of purchase applications growth, activity decreased for the fifth time in six weeks, but was still over 25% higher than a year ago and has increased year-over-year for six straight months. 2020 continues to overall be a strong year for the housing market.”  

The seasonally adjusted purchase index dipped 1% and dropped 3% on an unadjusted basis.

The refi share of mortgage activity increased from 66.7% to 68.7%, while the adjustable-rate mortgage share of activity held steady at 2.1% of total applications.

 Meanwhile, the FHA share of total applications fell from 11.7% the week prior to 11.1%. The VA share of applications jumped from 11.4% to 12.2%, and the USDA share stayed the same at 0.5%.