Fewer Refinances and Purchases Cause Mortgage Applications to Drop

Mortgage application volume was lower than the week before as both refinance and purchase activity declined.

The Mortgage Bankers Association's weekly index decreased 2.7% on a seasonally adjusted basis for the period ending Aug. 8. A week earlier, the index was up 1.6%.

The refinance index fell 4% week over week to its lowest level in three months, the Washington-based trade group said on Wednesday. There was also a 1% drop in purchase activity compared to a week ago. Meanwhile, government purchase loan applications decreased by 1% on a weekly basis, which is a new low point not seen since 2007, MBA said.

Refinances accounted for 54% of total applications, down one percentage point from a week before. The adjustable rate mortgage share remained unchanged at 8%.

All interest rates declined during this weekly period except for 30-year fixed mortgages, which held steady at 4.35%.

Both the average 30-year fixed jumbo mortgage and mortgages backed by the Federal Housing Administration compressed by two basis points, to 4.24% and 4.04%, respectively. A 15-year fixed-rate mortgage fell three-basis points, to 3.48%.

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