Despite attractive rate levels, mortgage application activity slipped in the week ending October 9. According to the Mortgage Bankers Association (MBA, the Refi Index was fractionally lower to 3374 from 3377, while the Purchase Index was 5 percent lower to 290.5.
The MBA reported a 13 basis points increase in the average contract rate for 30-year fixed mortgage rates to 5.02% which underscores borrower sensitivity to rate levels. At 4.89% in the week ending October 2, the Refi Index jumped 18%. A significant response in refinancing activity is generally expected at levels below 5%, but especially below the previous record low of 4.78%.
As a percent of application activity, refinancing share was 67.4% compared to 66.3% in the previous report. ARM share was slightly higher to 6.2% from 6.1%.
Currently, Fannie speeds in November (reported in December) are projected to increase over 5% as higher refinancing activity is partially offset by a two-day decline in the number of collection days to 19.