Applications for new mortgages rose for the second consecutive week as applications for new home purchases and refinances moved higher on near record low rates, according to the Mortgage Bankers Association.
Purchase applications grew by 3.9% for the week ending Oct. 22, while refinancing rose a more modest 3% over the previous week. The improvement in both categories indicates home purchases and refinances are growing as a result of lower interest rates coupled with lower home prices, which have been declining in the majority of the U.S.
The combined four week moving average is up a slight 1.4%. The Mortgage Bankers Association survey represents about 50% of the mortgage origination market, and is one of the oldest in the industry conducted on a weekly basis. The refinance share of the market dipped to 82.3% of all applications for home financing down a slight one-tenth of a percent from the prior week.
The average rate on a 30-year fixed rate mortgage at signing dropped to 4.25% with 1.0 point, slightly off the record low rate of 4.19% that was hit earlier in the month. Rates hadn’t been that low since 1951, according to the Federal Housing Administration (FHA). It was the second lowest rate in the bankers’ survey equaling the rate reached the week of Oct. 1.
The contracted interest rate for a 15-year fixed rate mortgage declined to 3.67% from 3.74% a week earlier with .96 points for an 80% loan-to-value mortgage, also the second lowest in the history of the survey.