Residential mortgage applications nationwide rose as lower interest rates helped boost refinancing activity, the Mortgage Bankers Association said today in its report for the week ended Oct. 10.

The trade group’s seasonally adjusted Market Composite Index – a measure of overall mortgage loan application volume – registered 489.3 points last week. That represented an increase of 5.1 percent from the preceding week’s 465.5 points, and 16.1 percent from the 421.6 points of the week ended Sept. 30 (READ MORE), but a decline of 17.0 percent compared with the same week a year ago.

Meanwhile, the MBA’s seasonally adjusted Purchase Index fell 0.3 percent week-over-week to 313.5 points, after rising 3.2 percent to 314.5 points in the week ended Oct. 3. The Refinance Index rose 12.9 percent to 1,514.2 points last week, after rising 0.9 percent the week before to 1,345.8.

The percentage of loan applicants who were looking to refinance rose to 46.4 percent last week from 43.4 percent the week before, the MBA said. The share seeking adjustable-rate mortgages (ARMs), rather than conventional fixed-rate loans, increased to 2.6 percent from the preceding week’s 2.3 percent of total applications.

“Treasury yields were extremely volatile last week,” Orawin Velz, the MBA’s associate vice president of economic forecasting, noted in today’s report.

“The yield on the 10-year Treasury note – the benchmark for 30-year fixed mortgage rate – moved up about 40 basis points over the course of the week. Lower yields earlier in the week appeared to have spurred refinance activity, which then faded as the week went on and rates began to rise.”

For all of last week, the average contract interest rate for a 30-year fixed-rate mortgage rose to 6.47 percent from 5.71 percent the week before. The average rate on a 15-year fixed-rate loan surged to 6.17 percent from the preceding week’s 5.71 percent. And the average contract interest rate on a one-year ARM edged up to 6.67 percent last week from 6.60 percent the week before.

Source: Providence Business News