Mortgage applications to purchase a home rose 3% last week from the previous week but surged 40% from a year ago, according to the Mortgage Bankers Association.
The year-on-year comparison is usually in single digits, CNBC explained.
The Market Composite Index, a measure of mortgage loan application volume, increased 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week.
The Refinance Index increased 3 percent from the previous week and was 60 percent higher than the same week one year ago.
The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 0.2 percent compared with the previous week and was 40 percent higher than the same week one year ago.
"Mortgage rates declined last week, with a noteworthy 5-basis-point decrease in the 15-year fixed rate to a new record low of 2.62 percent. The drop in rates led to a rebound in refinancing activity, driven mainly by borrowers applying for conventional loans," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
"Purchase applications were 40 percent higher than the same week last year, but the increase is skewed higher by being compared to Labor Day 2019. Nevertheless, there continues to be resiliency in the purchase market. Applications were up almost 3 percent on a weekly basis and the average loan size continued to increase, hitting a survey high at $368,600."
Added Kan, "Highlighting the strong overall demand for buying a home, conventional, VA and FHA purchase applications all increased last week."
The refinance share of mortgage activity increased to 63.1 percent of total applications from 62.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.2 percent of total applications.
The FHA share of total applications remained unchanged remained unchanged from 10.2 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.07 percent from 3.08 percent.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.62 percent from 2.67 percent.
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