Mortgage applications rebounded a week following the Labor Day holiday even as interest rates increased to their highest level since June.
During the week of Labor Day, loan application volume fell to their lowest levels in nearly 14 years down 7.2% on a weekly basis, according to Mortgage Bankers Association data.
However, for the weekly period ending Sept. 12, mortgage applications were up 7.9%, the Washington-based trade group said.
The refinance index was up 10% week-over-week, while the purchase index jumped 5% during this time period. Refinances accounted for 57% of total applications, the highest in seven months, and the adjustable rate-mortgage share of activity rose one basis point, to 7.6% of applications.
“Given the volatility in activity around the long weekend, it can be helpful to look at the change over a two-week span: refinance applications are down 1.4% while purchase applications are up 2.1%,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association. “Purchase volume continues to track almost 10% behind last year’s levels.”
All mortgage interest rate types were up in this week’s report, the MBA said. The average contract interest rate for 30-year fixed-rate mortgages and 30-year jumbo mortgages both increased nine basis points from a week earlier, to 4.36% and 4.24%, respectively. A 30-year mortgage backed by the Federal Housing Administration was up six basis points, to 4.03%. Additionally, the average 15-year fixed rate mortgage was up 12 basis points, to 3.56%.
The MBA survey covers 75% of all U.S. retail residential mortgage applications.