On Wednesday the Mortgage Bankers Association (MBA) said that mortgage loan volume increased last week. Meanwhile, the Federal Housing Finance Agency (FHFA) said that home prices continued to edge higher in July.
For the week ending September 20th, home loan applications increased 5.5 percent on a seasonally adjusted basis. The MBA said their refinance index increased five percent and their purchase index jumped seven percent. The Purchase Index was the highest since July 2013.
Sixty One percent of the loan activity involved refinancing, according to the report. This was unchanged from the previous week. Only seven percent of the loans were adjustable rate mortgages (ARMS).
“The government share of purchase applications decreased to 28.4 percent from 29.9 percent, the lowest level since early August and close to the series low of 28.2 percent in June 2013,” the report stated. The MBA said that the HARP share of refinance applications increased to 41 percent from 40 percent compared to the previous week.
There is some other good news. From June to July home prices increased one percent. The FHFA said that their home price index increased eighteen consecutive months. In June home prices increase 0.7 percent.
Historically low home loan rates have helped drive the resurgence in home values and loan volume. Last week the Federal Home Loan Mortgage Corporation (FHLMC) said conventional mortgage rates dropped to 4.5 percent.