Mortgage applications rose for the third consecutive week as purchase volume increased to its highest level since July 2013, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
The MBA’s market composite found that mortgage loan application volume increased 0.4% on a seasonally adjusted basis, as compared with the prior week, for the time period ending April 3.
The seasonally adjusted purchase index soared 7% above the week before, while the refinance index dropped 3% during the same time span.
“Purchase mortgage application volume last week increased to its highest level since July 2013, spurred on by still-low mortgage rates and strengthening housing markets,” Mike Fratantoni, MBA’s chief economist, said in an April 8 press release announcing the survey’s results.
The FHA share of total applications rose to 13.2% from 12.8%, while the VA share increased to 10.7% from 10.5% the week before.
On the flip side, the refinance and adjustable-rate mortgage shares of mortgage activity dropped to 57% and 5.5%, respectively, and the USDA share remained the same at 0.8%.
Interest rates also decreased during the week studied. The contract interest rate for 30-year fixed mortgages with a balance above $417,000 fell nine basis points to 3.81% from 3.9%, its lowest level since May 2013.
Similarly, the average contract interest rate for 5/1 adjustable-rate mortgages also fell to its lowest level since May 2013, ending the week at 2.76% as compared with 2.93% the week prior.
For 30-year fixed conforming mortgages below $417,000 the average interest rate fell to 3.86%, while the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA dropped to 3.69%.
The MBA’s weekly survey covers more than 75% of all U.S. retail residential mortgage applications, with respondents including mortgage bankers, commercial banks and thrifts.