After weeks of declining numbers, slightly lower interest rates apparently spurred a modest bounce in applications for mortgage refinancing.  The Mortgage Bankers Association (MBA) said that its refinancing index which measures application volume rose by 2 percent during the week ended August 30 and the refinancing portion of all applications increased to 61 percent from 60 percent a week earlier

Refinance Index vs 30 Yr Fixed

Applications for purchase mortgages however fell slightly.  The seasonally adjusted Purchase Index decreased 0.4 percent from the week ended August 23, and the unadjusted Purchase Index decreased 3 percent.  The unadjusted index was 6 percent higher than the same week in 2012.  MBA's Market Composite Index, a measure of overall application activity, increased 1.3 percent on a seasonally adjusted basis from the week before and 0.3 percent on an unadjusted basis. 

Purchase Index vs 30 Yr Fixed

MBA said that 38 percent of refinancing applications were for the Home Affordable Refinance Program (HARP) compared to 35 percent the week before.  This was the highest share for HARP since MBA began tracking the program in 2012.

Both contract and effective interest rates fell during the week.  The average contract rate for a 30-year fixed-rate mortgage (FRM) with a conforming balance of $417,000 or less decreased to 4.73 percent from 4.80 percent and points decreased to 0.33 from 0.41.  The jumbo 30-year FRM with balances over $417,000 had an average rate of 4.71 percent with 0.25 point compared to 4.78 percent and 0.34 point the previous week.  This was the second week in a row that the jumbo FRM carried a lower rate than the conforming version.

FHA-backed 30-year FRM had an average rate of 4.48 percent, down 4 basis points from a week earlier.  Points decreased to 0.03 from 0.32.

The rate for a 15-year FRM averaged 3.75 percent with 0.30 point during the week.  The previous week the average was 3.84 percent with 0.35 point.

The market share of adjustable rate mortgages (ARM) decreased slightly during the week to 7 percent.  The rate for the most popular ARM, the 5/1 hybrid, decreased 1 basis point to 3.49 percent and points were unchanged at 0.37. 

Mortgage rate quotes are for loans with an 80 percent loan-to-value ratio.  Points include the origination fee.

MBA's Weekly Mortgage Application Survey covers approximately 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.