WASHINGTON–Mortgage applications increased 10% from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 8, 2016.
The Market Composite Index, a measure of mortgage loan application volume, increased 10% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10% compared with the previous week. The Refinance Index increased 11% from the previous week to its highest level since February 2016, the MBA said.
The seasonally adjusted Purchase Index increased 8% from one week earlier, its highest level since October 2015. The unadjusted Purchase Index increased 9% compared with the previous week and was 24% higher than the same week one year ago.
"Helped by a persistently strong job market and low rates, applications for both conventional and government home purchase loans increased last week. The purchase index was at its second highest level since May 2010. Applications to refinance also increased as the 30-year contract rate decreased to its lowest level since January 2015," said Mike Fratantoni, MBA's chief economist in a released statement.
The refinance share of mortgage activity increased to 54.9% of total applications from 54.5% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5% of total applications.
The FHA share of total applications decreased to 10.8% from 11.3% the week prior. The VA share of total applications decreased to 11.9% from 12.2% the week prior. The USDA share of total applications remained unchanged to 0.8%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.82% from 3.86%, with points increasing to 0.33 from 0.32 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. This is the lowest since January 2015. The effective rate decreased from last week.
According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.66% from 3.73%, with points decreasing to 0.29 from 0.36 (including the origination fee) for 80% LTV loans. This is the lowest rate since April 2015. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.10%, with points remaining unchanged at 0.37 (including the origination fee) for 80% LTV loans. The effective rate was unchanged from last week.
The average contract interest rate for 5/1 ARMs increased to 2.94% from 2.94%, with points decreasing to 0.2 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.