Mortgage application volume rose 7.6 percent last week as interest rates declined to record lows, according to data from the Mortgage Bankers Association through July 16. Refinancing applications rose 8.6 percent week-over-week to their highest level since mid-May 2009, while purchase applications rose 3.4 percent from one week earlier.
The uptick in refinance applications was driven by a demand for conventional loans — up 10.7 percent — while government refinance applications declined by 4.2 percent. Meanwhile, applicants angling to take out loans for purchases increasingly looked to government loans, which were up 8 percent amongst that group. Conventional purchase applications rose just 0.3 percent week-over-week.
The increase in mortgage loan activity comes as interest rates reached record lows. The average contract interest rate for 30-year fixed-rate mortgages hit 4.59 percent last week, its lowest value ever recorded in the MBA survey, and the 15-year fixed-rate mortgage declined to a 4.05 percent interest rate, also a record low.
“Refinance borrowers, aiming for the lowest possible rate, are getting
conventional loans. The strength in purchase applications comes from
government loans, likely indicating that prospective buyers are drawn
by the lower down payment requirements,” said Michael Fratantoni, vice president of research and economics for the MBA. TRD