Mortgage Applications Rise on Falling Rates, Driven by VA Refinances
Washington, D.C. – Mortgage application volume increased last week as interest rates continued their downward trend, marking the latest sign of renewed activity in the housing market. The Mortgage Bankers Association (MBA) reported a jump in applications, fueled primarily by a surge in refinancing activity, particularly among veterans utilizing VA loans.
the overall refinance share of mortgage applications climbed to 60.2% of total applications, up from 59.8% the previous week. This increase was largely propelled by a nearly 15% rise in VA refinance volume, boosting the VA share of total applications to 17.5%. While demand typically cools in the fall, purchase applications remain robust, standing 18% higher than this time last year, indicating continued strength in homebuyer interest.
The decline in mortgage rates is a key driver of this activity.The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) fell to 6.34%, the lowest level seen in a year.Jumbo loan rates also decreased, landing at 6.44%. FHA-backed 30-year rates remained stable at 6.14%, while 15-year fixed rates experienced a slight increase to 5.70%. Adjustable-rate mortgages (ARMs) continued to lose ground, representing just 8.9% of all applications as borrowers favor the stability of fixed rates amidst ongoing market uncertainty.
Government-backed loans continue to play a notable role in the market. The FHA share of applications edged down to 15.7%, and the USDA share remained small at 0.4%. The average rate for 5/1 ARMs decreased to 5.53%.
