Homebuyers are clamoring to capitalize on the lowest interest rates in almost a year, driving total mortgage application volume 9.9 percent higher last week.
The Mortgage Bankers Association's seasonally adjusted weekly index is still 19 percent lower than the same week last year, due to lower refinance volume. The week's results included an adjustment for the Labor Day holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.03 percent from 4.06 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio loans.
"Overall, mortgage rates continued to decline last week with the 30-year fixed rate decreasing 3 basis points to its lowest level since the 2016 election. Rates have decreased almost 20 basis points since mid-July," said Joel Kan, an MBA economist.
After declining for weeks, mortgage applications to purchase a home jumped 11 percent for the week and were 7 percent higher than a year ago. Homebuying usually ramps up after Labor Day, and there is plenty of pent-up demand from buyers over the summer who ran up against tight inventory. Sellers also tend to list just after the holiday, which marks the unofficial end of summer.