Mortgage Applications Rise, Despite Increasing Interest Rates

Mortgage Interest Rates Drop

Mortgage applications jumped last week, rising nearly 7% over the previous week and 18% over the year. 

Refinance loan activity rose the most, with an 18% jump, while purchase applications increased 13%. Refinances are now 86% higher than the same week last year and account for 64.3% of all loan activity.

According to Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association, rates also rose, hitting their highest point since last month.

“Mortgage applications activity remained strong last week, even as the 30-year fixed-rate mortgage and 15-year fixed-rate mortgage increased to their highest levels since late August,” Kan said. “Purchase applications were up over 25% from a year ago, and the demand for higher-balance loans pushed the average purchase loan size to another record high. The strong interest in home buying observed this summer has carried over to the fall.”

Interest rates did indeed rise on most loan products, with the exception of jumbo loans and 5/1 ARMs, which saw a slight dip over last week. 

More in mortgage and housing news

  • The share of mortgage loans in forbearance dropped to 6.93% this week, according to the MBA. An estimated 3.5 million American homeowners are currently in forbearance.
  • New CoreLogic data revealed that homeowner equity jumped by $620 billion in the second quarter of 2020 — a 6.6% increase over the year. Meanwhile, the number of homes with negative equity dropped, hitting their lowest point in over a decade.
  • According to MBA, a whopping 11 million Americans fell behind on their rent or mortgage during the first three months of the coronavirus pandemic. More than 10% of renters missed at least one payment. About 5% of mortgage borrowers did. Another 20% received permission to delay or reduce their payment.

This week in mortgage rates

Rates increased slightly across most loan types this week. Only 30-year jumbo loans and 5/1 adjustable-rate mortgages saw a drop (though just a small one).

Here’s how rates shook out across loan types:

  • All 30-year, fixed-rate loans: 3.10%, 0.46 points
  • Jumbo 30-year, fixed-rate loans: 3.35%, 0.42 points
  • FHA 30-year, fixed-rate loans: 3.23%, 0.37 points
  • 15-year, fixed-rate loans: 2.64%, 0.47 points
  • 5/1 ARMs: 3.19%, 0.64 points

Check back here next week for the latest mortgage rates.

Information contained in this article may include links or references to third-party resources or content. Embrace Home Loans does not endorse or guarantee the accuracy of this third-party information. If you follow these links, you will be linking to a third party website not operated by Embrace. We are not responsible for the content of that website and its privacy & security policies may differ from those practiced by Embrace.

​This information is distributed for professional use and is not intended to be shared with, or viewed by, consumers. To the average consumer, the information here may be misleading or exclude important disclosures.

Share this:
Related
By Aly Yale / September 25th, 2020 / Categories: , / Tags:

Aly Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.