Applications for new mortgages jumped 9.3% for the week that ended Sept. 23, a sign that ultralow rates are finally spurring new business activity.
According to an index created by the Mortgage Bankers Association, refinancings continued to dominate the residential landscape, accounting for 79.7% of all applications, compared with a reading of 78.3% a week earlier.
The trade group said the refi share was the highest it's been since January of this year.
Lenders are still waiting for more renters to become homeowners, but for now will live off the refi wave for as long as they can.
Mike Fratantoni, the MBA's vice president of research and economics, noted that purchase applications also rose but only for conventional loans. "Purchase applications for government loans fell by 0.6% over the week, likely influenced by the pending decline in FHA loan limits," he said.
In a few days — unless Congress acts — the Fannie Mae/Freddie Mac loan limit will decline to $625,500 from $729,750, a change that would also affect Federal Housing Administration mortgages.
Borrowers continue to opt for fixed-rate loans; adjustable-rate mortgages accounted for just 6.1% of activity, down from 6.7% the weak prior.
The MBA said the average size of a loan originated in August was $212,700, compared with $211,200 in July.
