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Mortgage applications surge to highest level in 8 months

Posted on Thursday, October 8, 2015 at 9:21:31 AM

The average 30-year fixed-rate mortgage dropped below 4 percent the week ending Oct. 2, and homebuyers rushed to fill out their mortgage applications. 

The Mortgage Bankers Association Weekly Mortgage Applications Survey found that applications rose substantially from a week earlier to their highest level in eight months. The Market Composite Index, a gauge of mortgage loan application volume, shot up to 534.2, a 25.5 percent week-over-week increase. The sharp rise in applications came just ahead of the introduction of two new mortgage disclosure forms.

The surge was at least partially attributable to the fact that the average interest rate for a 30-year fixed-rate mortgage fell from the previous week's 4.08 percent to 3.99 percent, the lowest it has been in five months. The refinance share of mortgage activity fell from 58 percent to 57.4 percent, while the adjustable-rate mortgage share rose to 7.6 percent. 

The drop in mortgage rates came as continued global market volatility raised the prospect of the Federal Reserve pushing back an interest rate hike from late this year into 2016.