As August drew to a close, agents were faced with an increasing number of clients sitting on the fence, waiting to see if mortgage rates would slip even lower.
The clouds seemed to part as the calendar turned to September, as mortgage applications gained 3.3 percent on a seasonally adjusted basis according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Refinance loans took a 50.9 percent share of all new mortgage applications last week, their highest share since January.
Additionally, mortgage applications gained 3.3 percent on a seasonally adjusted basis according to the MBA’s Weekly Mortgage Applications Survey.
A big of good news for agents: MBA’s Purchase Index was up 1 percent from a week earlier and and up 5 percent year-over-year. Refinance activity surged 5 percent.
ARMs made up 7.2 percent of total mortgage applications.
The share of FHAs dipped to 9.6 percent (from 9.7 percent a week earlier) while VAs dropped to 9.7 percent.
Joel Kan, an MBA economist, told CNBC that heightened geopolitical tensions last week brought mortgage rates to their lowest level since the 2016 election.
“Refinance volume jumped as a result, and for the first time since January, the majority of application volume was for refinances, with the refinance share almost 51 percent.”
The average rate for a conforming loan (4.6 percent), FHA (3.98 percent) Jumbo (3.96 percent) as well as 15-year FRMs (3.34 percent) and 5/1 ARMs (3.14 percent); slid to the lowest levels since November 2016.
The effects of Hurricane Harvey also had an impact on application volume, as banks shut down all mortgage activity for areas affected by the storm. It is likely that Irma could have a similar impact on Florida, as Kan noted banks need to assess damage and reappraise some homes before either purchase or refinance applications can be approved.
“Focusing in on Texas, unadjusted application volume was down 21.7 percent for purchase and 22.9 percent for refinances.”
The MBA survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.