Mortgage loan application volume decreased by 2.5% on a seasonally adjusted basis for the week ended Aug. 23, according to the Mortgage Bankers Association, with a drop in refinances continuing to have a major role in this downfall.
MBA said refinance activity fell 5%
Overall, the refinance share of mortgage activity now represents 60% of total applications, down from 61% the prior week. This figure, MBA noted, would be the lowest share observed since April 2011.
Meanwhile, the seasonally adjusted purchase index increased 2% on a weekly basis. On an unadjusted basis, purchase activity was 6% higher compared to the same week a year ago.
Market observers are closely monitoring how rising interest rates will impact the housing industry.
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HSH.com’s weekly mortgage radar showed a smaller uptick in rates through the week ending Tuesday, with the average rate for conforming 30-year fixed-rate mortgages rising by five basis points to 4.66%.
MBA’s latest application survey revealed the average contract rate for the 30-year conforming FRM ($417,000 or less) increased by 12 basis points to 4.80%, the highest rate since April 2011. Also, the 30-year fixed rate mortgage for Federal Housing Administration-insured loans rose to 4.52% from 4.40% a week earlier.
However, Zillow’s Mortgage Marketplace rate tracker revealed a 12 basis point decline to 4.40% as of Tuesday afternoon from last week’s 4.52% for 30-year fixed-rate mortgages.