PhotoA sharp rebound in government volume helped push mortgage applications higher last week.

The Mortgage Bankers Association (MBA) reports its weekly survey shows applications jumped 11.8% in the week ending October 16. The results include an adjustment to account for the Columbus Day holiday.

“On an adjusted basis, application volume increased last week, led by a sharp rebound in government volume,” said MBA Chief Economist Mike Fratantoni. “We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures.”

The Refinance Index increased 9% from the previous week, while the refinance share of mortgage activity fell to 59.5% of total applications from 61.2% the previous week. The adjustable-rate mortgage (ARM) share of activity dipped to 6.9%.

The FHA share of total applications rose to 14.3% from 12.6% the prior week, the VA share applications increased to 12.7% and the USDA share inched up to 0.6% from 0.5% a week earlier.

Contract interest rates

  • The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) fell four basis points -- from 3.99% to 3.95 percent, the lowest level since May 2015, with points decreasing to 0.43 from 0.53 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) dipped to 3.87%, the lowest level since April 2015, from 3.89%, with points decreasing to 0.29 from 0.41 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA dropped four basis points to 3.78%, the lowest level since May 2015, with points unchanged at 0.39 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 15-year FRMs was unchanged at 3.20%, with points decreasing to 0.34 from 0.39 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 5/1 ARMs was down six basis points to 2.94%, the lowest level since May 2015, with points decreasing to 0.35 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.


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