Mortgage activity as measured by prospective homebuyers’ applications for financing continued its positive momentum last week, notching a 0.6% increase from the week prior according to new figures from the Mortgage Bankers Association (MBA).

The adjustable-rate mortgage (ARM) share of activity, which rose to nearly 13% of applications over a span of recent weeks, decreased to 8.9% of total applications, as tracked by the MBA’s Market Composite Index, a measure of mortgage loan applications.

Mortgage rates that declined to their lowest levels since last September at 6.34%, according to MBA data, pushed refinances to more than 60% of all mortgage activity, the association noted in a press release. Purchase activity declined slightly from the week prior.

“While homebuyer demand typically tends to decrease during the fall, purchase application activity remains relatively strong right now, running 18% ahead of last year’s pace,” said Mike Fratantoni, senior vice president and chief economist at the MBA.

With refinance activity running 80% higher than four weeks ago, Fratantoni also acknowledged MBA’s expectations for mortgages rates to move higher in the aftermath of the Federal Reserve’s highly anticipated rate-cut decision last week.

“Interest rates generally have moved up following the FOMC meeting last week but remain in a range that should continue to lead to increased refinance activity,” he said. “The refinance boost last week was from government applications, with VA refinance volume up almost 15%.”

The share of applications backed by the Federal Housing Administration (FHA) fell to 15.7% from 16.3% the week prior, while the share backed by the Department of Veterans Affairs (VA) increased to 17.5% from 15.8% the previous week.

The average rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.34% from 6.39%, while the average rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged from the previous week at 6.14%.

The average contract interest rate for 5/1 ARMs — whereby a borrower pays a fixed mortgage rate for the first five years of the loan term, after which it adjusts on an annual basis — continued to decline, dropping 12 basis points to 5.53% from 5.65%.