Mortgage applications show resurgence not seen since April
The average loan size for a home purchase is $333K and a refi $396K
Housing expert warns of problems if prices don't get 'under control'
National Association of Home Builders CEO Jerry Howard says organic housing demand could causing pricing problems.
People are showing renewed interest in the housing market as the latest figures show a resurgence in mortgage applications last week not seen since the spring.
The Market Composite Index, a measure of mortgage loan application volume, increased 4.9% on a seasonally adjusted basis from the week of Sept. 17. The previous week’s results included an adjustment for the Labor Day holiday.
"There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021," MBA Associate Vice President of Economic and Industry Forecasting Joel Kan said.
On an unadjusted basis, the MBA report said, the index increased 16% compared with the previous week, while the Refinance Index increased 7% from the previous week and was 5% lower than the same week one year ago.
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In addition, the seasonally adjusted Purchase Index increased 2% from one week earlier. The unadjusted Purchase Index increased 12% compared with the previous week and was 13% lower than the same week one year ago.
People are showing renewed interest in the housing market as the latest figures show a resurgence in mortgage applications last week not seen since last April. (AP Photo/Michael Conroy, File) (AP)
"Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory, Kan said. "The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale. Despite this week’s increase, purchase applications were still 13 percent lower than the same week a year ago."
"Homeowners acted while rates remained low at 3.03 percent," Kan added. "This week’s refinance gain of 7 percent was driven heavily by an increase in FHA and VA applications."
The refinance share of mortgage activity increased to 66.2% of total applications from 64.9% the previous week, the MBA report said. The adjustable-rate mortgage (ARM) share of activity decreased to 2.9% of total applications.
The FHA share of total applications increased to 11.5% from 9.9% from the prior week. The VA share of total applications also increased to 10.4% from 10.2% from the prior week. The USDA share of total applications increased to 0.5% from 0.4% the week prior.
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Additionally, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03% , with points decreasing to 0.30 from 0.32 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.