Interest rates dropped last week, giving homeowners and home buyers more incentive to lock in a lower rate as they apply for a mortgage. Total mortgage application activity for home buying and refinancing rose 3 percent on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reported Wednesday. Applications, however, are still down by 25 percent from a year ago.
Refinance applications saw the most activity last week, increasing 5 percent week over week. Still, refinance applications are down 44 percent from a year ago when mortgage rates were lower.
“Mortgage rates decreased last week, which led to the highest volume of refinance applications since mid-June,” says MBA chief economist Mike Fratantoni.
The 30-year fixed-rate mortgage averaged 4.14 percent last week, down from 4.17 percent the week prior, the MBA reports.
Meanwhile, mortgage applications for purchasing a home saw a 1 percent increase compared to the previous week.
“With rates trading in a narrow range, the purchase market continues to show strength, with application volume running about 7 percent ahead of last year,” Fratantoni says.