“The refinance share of mortgage activity increased to 58.4 percent of total applications from 56.2 percent the previous week,” the Mortgage Bankers Association said. “The adjustable-rate mortgage (ARM) share of activity increased to 6.9 percent of total applications.”
The lead up to last week’s rate decision may have caused some rate volatility, but the eventual decision helped boost broker business for originations as well.
Applications jumped 13.9% for the week ending September 18.
"We saw significant rate volatility last week surrounding the FOMC meeting, and rate declines toward the end of the week likely drove applications from both prospective home buyers and borrowers looking to refinance,” Mike Fratantoni, MBA's chief economist said. “The 30-year fixed rate remained unchanged over the week even though there was substantial intra-week fluctuation, but we saw rate decreases in other loan products like the 15-year fixed, 5/1 ARM, and 30-year jumbo.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming balances held steady at 4.09%.
The average 30-year fixed for a jumbo loan fell to 3.99% from 4.04% -- marking the lowest rate for these mortgages since May. Brokers originating these loans also benefitted from increased commissions, with points rising to 0.36 from 0.26 (including origination fee) for 80% LTV products.
Refinance business continues to show strong performance – and that trend is expected to continue following the latest Fed decision.