The week following Labor Day saw a flurry of mortgage loan application activity, with volume jumping by 4.9% for the seven days ending Sept. 17, according to the Mortgage Bankers Association. Refis were on the front foot again.
The increase in application activity is quite different from the MBA’s survey published in early September, which saw application volume decline by 1.9%, dragged down in part by low refi activity and unexpectedly low purchase volume.
Joel Kan, associate vice president of economic and industry forecasting at MBA, at the time noted that the “economic data has sent mixed signals.” But it seems that this week’s data is more straightforward.
Both the refi index and the purchase index came in strong. According to the MBA, the refi index increased by 7% from the previous week but hovered 5% lower than the same week on year ago today.
Moreover, the purchase index increased by 2% from one week earlier, while the unadjusted purchase index grew by 12% compared with the previous week.
Kan said in a statement that the surge in both refis and purchases was mainly driven by rates that remained low at 3.03%.
“There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Kan.
He added, “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale.”
However, Kan did note that despite the uptick in activity, purchase applications “were still 13% lower than the same week a year ago.”
Overall, the refi share of mortgage activity once again increased, inching up to 66.2% of total applications from 64.9% last week.
The MBA said that the refi activity was pushed by an increase in FHA and VA applications, with the share of total FHA applications increasing to 11.5% from 9.9% the week prior.
The VA share of total applications jumped to 10.4% from 10.2% the previous week, while the USDA share increased to 0.5% from 0.4%, the trade group said.