The average rate on 30-year fixed-rate mortgages fell to 4.97 percent for the week ending Sept. 18, down from 5.08 percent the week before. That's more than a full point lower than the 6.08 percent rate reported for the same week one year ago.
The current rate was based on an average of 1.12 points paid, up from 0.98 points the week before. Averages are based on loans with an 80 percent loan-to-value ratio.
Applications to refinance existing home mortgages jumped 17.4 percent for the week, with refinances making up 63.8 percent of all mortgage applications. Applications for home purchase mortgages rose 5.6 percent, with applications for government-insured mortgages making up 45.7 percent of all purchase applications.
Most government mortgages since 1990
It's the greatest share that government-insured mortgages have represented since the MBA began tracking weekly mortgage data in 1990. The increase has been driven by the rising popularity of FHA mortgages, which remain one of the only places consumers can obtain a mortgage with little money down, requiring only a 3.5 percent down payment. FHA mortgages are also easier to obtain for borrowers with less-than-ideal credit.
Mortgage applications of all types were up 12.8 percent on a seasonally adjusted basis.
The weeks ahead could see steady or increasing demand for home purchase mortgages, as first-time home buyers seek to beat the November 30 deadline for the $8,000 federal tax credit. With time running short on the program, buyers are expected to redouble efforts to find and close on suitable properties by the deadline.
There have been indications that Congress may extend the program, but it is not yet clear whether it will do so or if the same terms will be continued in an extension.
15-year mortgage rate unchanged
Meanwhile, the average on 15-year fixed rate mortgages remained unchanged at 4.41 percent, though the average points paid, including origination fees, declined to 1.05 percent from 1.12 percent the week before.
The rates reported by the MBA are national averages and will vary by region and credit score. Persons with excellent credit may be able to pay two- to three-tenths of a percent less than the reported average, depending on their lender or broker.
The MBA survey is one of several major weekly mortgage rate surveys that typically report varying results. Two other major surveys, the Bankrate and Freddie Mac surveys, are due out later today and tomorrow morning, respectively.
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