Mortgage application volume increased last week behind a surge in refinance and purchase activity.
The Mortgage Bankers Association’s index rose 3.8% in the period ending Oct. 3 after decreasing 0.2% a week earlier.
The refinancing index jumped 5% week-over-week, while the purchase gauge was up 2% to reach its highest level since July, the Washington-based trade group said. The share of applicants seeking to refinance remained at 56% of total mortgage loan applications.
All interest rate types fell during this weekly time period. For example, the average rate on a 30-year fixed-rate mortgage decreased three basis points, to 4.3%. Additionally, the average 30-year jumbo mortgage loan as well as mortgage loans backed by the Federal Housing Administration both dropped seven basis points, to 4.21% and 4%, respectively.
The average interest rate for 15-year fixed mortgages plunged seven basis points, to 3.48%.
“A drop in interest rates drove the spike in mortgage activity,” said Bill Banfield, vice president at Quicken Loans. “It’s clear potential buyers and refinancers are paying close attention to the financial markets and where they are pushing rates. The informed consumers will see that rates can push back up at the whim of the market so they must act fast when it makes financial sense for them.”