Applications for Mortgages Surge 11.1%

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

As interest rates continued to decrease, American mortgage applications surged 11.1% during the first week of September, according to an industry trade group.

The Mortgage Bankers Associate attributes the substantial increase in refinance activity for the week to a possible overstatement, due to the fact that some lenders operate solely on the internet. Combined with many homeowners having Labor Day off, the Mortgage Bankers Associate believes that they applied online or through direct origination channels, filling out applications during the holiday and thus causing this increase. Accordingly, lenders who operate retail offices saw a decline in applications.

From the previous week, the adjusted refinance index rose 12%, and the purchase index grew 8%.

In addition, in terms of mortgage activity, refinancing comprised 80% of mortgage applications, increasing from 70% a week prior.

The standard 30-year fixed-rate conforming conventional loan balance decreased from 3.78% to 3.75%. Fixed-rate jumbo loans for 30-year mortgages also fell from 4.05% to 4%.

FHA-insured fixed-rate loans for 30-year mortgages dropped from 3.54% to 3.50%, reaching a new low for the Mortgage Bankers Association survey.

Furthermore, the 15-year fixed-rate mortgage declined from 3.10% to 3.07%, with the 5/1 adjustable-rate mortgage coming in at 2.63% at a slight decrease from last week.