Mortgage Applications Decline, but Purchases Increase Slightly

Mortgage application volume decreased from the previous week as refinances fell but purchase activity rose slightly.

The Mortgage Bankers Association's weekly index showed that loan applications were down 2.2% for the period ending July 25, after increasing a week earlier.

The decline occurred because of a 4% drop in refinances, according to the Washington-based trade group. However, the purchase index rose 0.2% from the previous week as home prices begin to stabilize and the interest rate environment remains low.

The average interest rate for a 30-year fixed mortgage remained unchanged at 4.33%. A 30-year mortgage rate backed by the Federal Housing Administration also held steady at 4.03%. Borrowers looking for a 15-year mortgage saw average rates of 3.47%, the same as the week before.

Refinances accounted for 53% of total applications, the MBA said on Wednesday, while adjustable-rate mortgages represented 8% of the loan volume.

The MBA's weekly survey covers over 75% of all U.S. retail residential mortgage applications.

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Comments (2)
My guess is that most refi's done in the past few years have been HARP. With the program expiration coming up most people have touched their portfolios of HARP-able opportunities. Folks that have done a HARP in the last few got such low rates they will look for other options such a HELOCs and HELs to access cash if they do have equity since there interest rate on the first is so low... Combine that with people not secure in their jobs, there is a change in attitude about using home investment as ATM, and others not having equity in their home to cash out it looks pretty bad for refi's for awhile.
Posted by SLH in STL | Thursday, July 31 2014 at 10:26AM ET
Why have the Refinances declined so much in the past year? With rates still hovering around 4% it doesn't really make sense to me? Anyone who has any answers or thoughts, let me know
Posted by paul w | Wednesday, July 30 2014 at 1:18PM ET
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