WASHINGTON (10/31/13)--Mortgage applications increased by 6.4% on a seasonally adjusted basis for the week ending Oct. 25, according to data released by the Mortgage Bankers Association.
The group's Market Composite Index, which gauges mortgage application volume, showed that refinancing accounted for the lion's share of the activity, with the MBA Refinance Index up 9% from the previous week.
The Purchase Index was up just 2%, last week, with potential first-time home buyers continuing to be skeptical or priced out of home ownership entirely. While homeowners making their debut normally make up about half of all residential housing purchases, existing-home sales in September showed that first-time home buyers only made up about 28% of such purchases last month, with young adults facing an employers' labor market, and high levels of student debt (Moody's Economy.com Oct. 30) .
Meanwhile, refinancing as a share of total mortgage market application activity, increased to 67%--the highest it has been since June, as interest rates decline. MBA data show that 30-year fixed-mortgage rates, 30-year jumbo mortgage rates, and five-year adjustable rate mortgages have mostly declined between Sept. 6 and last week.
The MBA Market Composite Index accounts for 75% of U.S. retail residential mortgage applications, and has been conducted weekly since 1990.