Applications for new mortgages jumped 8.1 percent in the past week as the 30-year fixed-rate mortgage dropped below 4 percent, according to the Mortgage Bankers Association's Weekly Mortgage Application Survey.
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The refinancing index rose 14 percent from the previous week and was 133 percent higher than the same week a year ago.
The refinance share of mortgage activity accounted for 58 percent of total applications.
“Mortgage rates mostly decreased last week, with the 30-year fixed rate dropping below 4 percent for the sixth time in the past nine weeks. Borrowers responded to these lower rates, leading to a 14 percent increase in refinance applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016. The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist.”
The adjustable-rate mortgage shares of activity increased to 5.5 percent of the total.
In the past week, the average 30-year mortgage rate slipped to 3.98 percent from 4.02 percent a week ago.
The survey has been conducted weekly since 1990 and covers 75 percent of all U.S. retail mortgage applications.