Mortgage Apps: Modest Rebound in Refis, Purchases Fall Slightly

Bottom Line: Mortgage rates dropped to 3.90% on the average 30-year fixed-rate last week, sending refinancing applications modestly higher. After several years of little refinance incentive, homeowners are clearly taking the opportunity to refi when they can, kepping the trend in refi applications higher as long as rates stay below 4.125%. Purchase applications remained mostly sideways with the four-week average unable to get back over the highs seen earlier this year. For now, the trend in purchase activity is still up, but we're watching this closely as the trend has lost momentum even as rates have come back down. The MBA Mortgage Applications Index ROSE by 8.1% during the week ended September 27 to 553.8, slightly above its 13 week average of 543.5 and 57.1% ABOVE its year ago level. The Purchase Index ROSE by 0.9% to 263.8, modestly above its 13 week average of 255.7 and 9.6% ABOVE its year ago level. The Refinance Index ROSE by 14.2% to 2,203. Despite this increase, refinancing activity is slightly above its 13 week average of 2,185 and 132.9% ABOVE its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 3 bps to 3.99% and with the 15-year fixed rate declining by 3 bps to 3.43%.