Mortgage applications during the week ended October 7 were 1.3 percent higher than during the previous week according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.  The Market Composite Index increased 1.3 percent on both a seasonally adjusted and an unadjusted basis compared to the week ended September 30.

The Refinance Index also increased 1.3 percent while the Purchase Index rose 1.1 percent on an adjusted basis and 1.2 percent unadjusted.  The Purchase Index was 2.9 percent lower than during the same week in 2010.

Increased activity in the government loan category drove the changes.  The index measuring applications for government-backed purchase mortgages rose 2.4 percent from the previous week while the Government Refinance Index jumped 9.9 percent.  Increases measured by the Conventional Purchase and Refinance Indexes were up 0.1 percent and 0.2 percent respectively.

The four week moving averages for the Market Index and the Purchase Index were both up.  The former rose 1.56 percent and the latter 2.15 percent.  The moving average for the seasonally adjusted Purchase Index was down 0.51 percent.

Refinancing as a share of total mortgage application activity was unchanged from the previous week at 79.1 percent and the adjustable-rate mortgage (ARM) portion was down 6.0 percent to 6.4 percent of all applications.

Monthly data for September showed that mortgages for purchases averaged $210,863 compared to $212,736 in August.  Loans for the purpose of refinancing averaged $237,632 in September compared to $241.323 the previous month. 

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Interest rates increased for all categories of mortgages during the week.  The average contract rate for conforming 30-year fixed-rate mortgages (FRM) (mortgages with balances under $417,500) was 4.25 percent with 0.47 point including the origination fee compared to 4.18 percent with 0.44 point during the week ended September 30.  Rates for conforming 15-year FRM rose to 3.53 percent from 3.49 percent with points unchanged at 0.45.  The effective rate increased for both products.

Jumbo loans, those with loan balances greater than $417,500, had an average rate of 4.59 percent with 0.49 point, up from 4.49 percent with 0.41 point.  The effective rate also increased. 

The rate for 30-year FRM backed by FHA rose one basis point to 4.06 percent while points decreased to 0.58 from 0.69.  The effective rate decreased from the previous week.

The average contract interest rate for 5/1 ARMs increased to 3.03 percent from 3.02 percent, with points increasing to 0.54 from 0.41.  The effective rate increased. All interest rate averages are for loans with an 80 percent loan-to-value ratio. 

The weekly MBA survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Base period and value for all indexes is March 16, 1990=100.