For the week ending September 18, 2020, the Mortgage Bankers Association’s latest Weekly Application Survey showed a jump in application activity, both in purchasing and refinancing, as its Market Composite Index increased 6.8% from the previous week on a seasonally adjusted basis.
Most notably, the Purchasing Activity reached its highest level since January 2009, when it was only 5.3% higher. The refinancing activity level increased by 8.8% from the previous week, despite an increase in the MBA’s tracked contract rate of the 30-year fixed-rate mortgage by 3 basis points to 3.1%, still a few basis points above the record low rate reached at the beginning of August. The solid level of home buyers reflects a robust housing market that has proven to be resilient in the face of the current economic downturn, driven by some changes in the geography of demand.
There were strong year-over-year gains this week, as well, as shown in the figure above. On an unadjusted basis, purchasing was 25% above what it was than the same week one year ago and refinancing was 86% above what it was the same week one year ago. Despite the strong, positive year-over-year gains in refinancing, the momentum evident at the beginning of the year has significantly slowed, with year-over-year gains less than what they were at the end of 2019.
The refinance share of mortgage activity increased to 64.3 percent of total applications from 62.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.2 percent of total applications.