“Lower rates led to an increase in refinance applications, with government loan applications jumping 10% to the highest level since May 2021,” Kan added. “Purchase applications for both conventional and government loans also increased. The purchase index was at its highest level since early July, despite continuing to lag 2020’s pace.”
The refi share of mortgage activity held steady at 67.3% from the week prior. The FHA share of total applications increased from 9.4% to 11%, while the VA share dropped three basis points to 10%, and the USDA share remained unchanged from 0.4% the previous week.
Additionally, Kan noted some easing in average loan sizes, which may be a sign that “more first-time buyers looking for lower-priced homes are being helped by the recent uptick in for-sale inventory for both newly built homes and existing homes.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased three basis points to 3.03%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) was down six basis points to 3.13%.