Mortgage Applications Dip Again; Purchase Loan Requests Slide 8%

Mortgage applications decreased last week from the previous week, led by a drop in purchase loan requests.

The Mortgage Bankers Association's index revealed that loan application volume fell 3.6% on a seasonally adjusted basis for the period ending July 11 after increasing the previous week, which included an adjustment for the July 4 holiday.

The dip in mortgage activity was mainly attributed to an 8% decline in purchase applications. These applications, where the average loan size sought was $268,500, plunged to their lowest level since February, the Washington-based trade group said on Wednesday.

Meanwhile, refinance activity was only down 0.1% from the prior week.

Refis accounted for 54% of total mortgage applications, a two percentage point uptick from the week before, while adjustable-rate mortgages remained unchanged and represented 8% of total applications.

"While we try not to put too much focus on week-to-week fluctuations, it can be disappointing to see any substantial drop in purchase activity," said Bill Banfield, a vice president at Quicken Loans. Still, "based on where the July 4 holiday fell this year, it's possible many homebuyers were enjoying a vacation with their family instead of applying for a mortgage."

The average rate on a 30-year fixed-rate mortgage was up one basis point to 4.33%. A 30-year mortgage backed by the Federal Housing Administration saw its average interest rate increase two basis points to 4.04%. Homeowners applying for a 15-year fixed-rate mortgage saw average interest rates rise one basis point to 3.41%, the MBA said.

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Comments (1)
"it's possible many home buyers were enjoying a vacation with their family instead of applying for a mortgage."

Yeah right! And Obama didn't have anything to do with the immigration problems. And the employment rate just increased. And the price of gas is going to $1.50 a gallon.

This second real estate recession is a result of congress ignoring the fact that mortgage based securities still exist. These were the primary cause of the corruption causing the first bubble to grow and to burst. Congress and the Administration should have reinstated legislation to terminate mortgage backed securities and take a consumer advocacy position rather than a stock market position.
Posted by John R | Wednesday, July 16 2014 at 5:08PM ET
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