For the week ending October 2, 2020, the Mortgage Bankers Association’s Weekly Application Survey, showed a 4.6% increase in overall mortgage activity from the previous week on a seasonally adjusted basis, as seen in its Market Composite Index.
The growth was driven primarily by the Refinancing Index, which shot up by 8.2% from the previous week, driven by a drop in the 30-year fixed-rate mortgage rate by four basis points to a new record low in the series of 3.01%.
The Purchasing Index sank by 1.5% from the previous week. The MBA cites that the adverse economic impact caused by the current pandemic poses barriers to entry of low and moderate income-earning households to lower tiers of the homebuying market, reflected by yet another high reached in the series of the average loan size.
Year-over-year percentage changes were still positive for both Purchasing and Refinancing on an unadjusted basis: 21% and 50%, respectively. The refinance share of mortgage activity increased to 65.4% of total applications from 63.3% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.2% of total applications. The average loan size reached a survey high of $371,500.