An increase in homeowners’ bids to refinance drove up the volume of mortgage applications last week.
An index tracking home refinance applications increased 3 percent, seasonally adjusted, in the third week of October, compared to the prior week, according to the Mortgage Bankers Association’s weekly survey.
The metric, known as the refinance index, was up 80 percent year-over-year.
MBA’s purchase index, which tracks the number of mortgage applications to buy homes, was essentially flat with an increase of 0.2 percent compared to the week before, breaking a four-week stretch of declines.
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Joel Kan, MBA’s head of industry forecasting, maintained that homebuyer demand remains strong, noting that the purchase index last week was still up 24 percent year-over-year and the average purchase loan size hit $372,600, a new record in the history of MBA’s 30-year survey.
“These results highlight just how strong the upper end of the market is right now, with outsized growth rates in the higher loan size categories,” he said in a statement.
The median sales price for the 6.5 million existing homes sold last month was $311,000, while the median price for newly built homes was $326,800.
The high prices are also being driven by severe housing shortages, he noted.
The average 30-year, fixed-rate mortgage dropped to 3 percent, the lowest rate in the history of MBA’s weekly survey. That’s a drop of 2 basis points from the previous week’s 3.02 percent. The rate for jumbo loans dropped to 3.28 percent from 3.33 percent the week prior.
Refinancing applications made up 66.7 percent of the total mortgage applications last week. The activity drove MBA’s overall index, which tracks 75 percent of all residential loans, up 1.7 percent, seasonally adjusted.