Mortgage applications were up 11% from one week earlier for the week ending Sept. 20, according to the latest Weekly Applications Survey report from the Mortgage Bankers Association (MBA).
The trade organization’s Market Composite Index (MCI), which tracks home loan application volume, was up 11% on both a seasonally adjusted and unadjusted basis. It’s the second straight week with a sizable jump in the index, which leaped 14.2% week over week on Sept. 13.
Both large upswings were fueled by strong refinance volume in the wake of downward sliding mortgage interest rates, which according to Freddie Mac fell to their lowest level since early 2023 as of last week. During the week ending Sept. 13, the MCI’s Refinance Index vaulted 24% from the previous week and 127% from the same week last year; during the week ending Sept. 20, the Refi Index jumped another 20% weekly and 175% annually.
The refinance share of applications rose to 55.7%, up from 51.2% the week prior, pushed by big week-over-week upticks in application activity for both conventional and government refis.
“Mortgage applications increased to their highest level since July 2022, boosted by a 20% increase in refinance applications after a large increase the prior week,” said Joel Kan, the MBA’s vice president and deputy chief economist. “The 30-year fixed rate decreased for the eighth straight week to 6.13 percent, while the FHA rate decreased to 5.99 percent, breaking the psychologically important 6% level.”
Dipping interest rates throughout the market were reflected in falling contract interest rates for new applications. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, for example, slipped to 6.13%, down from 6.15% one week prior. For 30-year fixed rate FHA loans, the average contract interest rate fell to 5.99%, down from 6.12% week over week.
Kan observed that “while the level of refinance activity is still modest compared to prior refi waves, they now account for the majority of applications, given the seasonal slowdown in purchase activity.”
Purchase activity, as Kan noted, is up but remains muted: The seasonally adjusted Purchase Index was up 1% week over week for the week ending Sept. 20.
