Mortgage Applications Drop 2.5% During Week

Mortgage application volume fell by 2.5% on a seasonally adjusted basis for the week ended Aug. 31, according to the Mortgage Bankers Association, even though rates for fixed rate loans declined during the period. The Refinance Index was off by 3% from the previous week, while the seasonally adjusted Purchase Index declined by 0.8%.

When compared with the same week in 2010, the Purchase Index was up by 1% on an unadjusted basis.

The market share of refi apps remained at 79%, while the share of apps for adjustable rate mortgages increased to 5%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) declined by two basis points from the previous week to 3.78%. The average contract interest rate for 30-year FHA-insured loans declined by six basis points to 3.54%.

The rate for 30-year FRMs with jumbo loan balances was down a single basis point to 4.06%. The average contract interest rate for 15-year FRMs fell two basis points to 3.10%. The rate for the 5/1 ARM was 2.64%, a decrease of four basis points.