Mortgage applications increased 8.1 percent from one week earlier,according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 27, 2019.

The Market Composite Index, a measure of mortgage loan application volume, increased 8.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 8 percent compared with the previous week. The Refinance Index increased 14 percent from the previous week and was 133 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 10 percent higher than the same week one year ago.

"Mortgage rates mostly decreased last week, with the 30-year fixed rate dropping below 4 percent for the sixth time in the past nine weeks. Borrowers responded to these lower rates, leading to a 14 percent increase in refinance applications," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016. The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist."

Added Kan, "Purchase applications also increased and remained more than 9 percent higher than a year ago. Low rates and healthy housing market fundamentals continue to support solid levels of purchase activity."

The refinance share of mortgage activity increased to 58.0 percent of total applications from 54.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.5 percent of total applications.

The FHA share of total applications decreased to 10.4 percent from 11.4 percent the week prior. The VA share of total applications decreased to 12.4 percent from 13.1 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 3.99 percent from 4.02 percent, with points remaining unchanged at 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 3.98 percent from 4.00 percent, with points increasing to 0.28 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.79 percent from 3.90 percent, with points remaining unchanged at 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.43 percent from 3.46 percent, with points increasing to 0.37 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.42 percent from 3.39 percent, with points increasing to 0.37 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.