Mortgage Applications Rise on Falling Rates, Driven by VA Refinances
Washington, D.C. – Mortgage application volumeโข increased last week as interest rates continued their downward trend, marking the latest sign of renewed activity in โthe housing market. The Mortgage Bankers Association (MBA) reported a jump in โขapplications, fueledโค primarily by a surge in refinancing activity,โฃ particularly among veterans utilizing VA loans.
theโข overall refinance share of mortgage applicationsโ climbed to 60.2%โฃ of total โขapplications, up from 59.8% theโ previous week. This increase was largely propelled by a nearly 15% rise in VA refinance volume, boosting the VA โขshare of total applicationsโ to 17.5%. While demand typicallyโข cools in the fall, purchase applications remain robust, โstanding 18%โ higher โthan this time last year, indicating continued strength in homebuyer interest.
Theโฃ decline in mortgage rates is a โkey driver of this activity.Theโฃ average contract interest rate for 30-year fixed-rate mortgages with conforming loan โขbalances โ($806,500โฃ or less) fell to 6.34%, the lowest level seen in a year.Jumbo loan rates also decreased, โขlanding at 6.44%. FHA-backed 30-year rates remained โstable at 6.14%, while 15-year fixed rates experienced โa 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 โrates 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 โARMs decreased to 5.53%.