Mortgage application volume drops for fifth consecutive week
Mortgage applications waned for the fifth week in row, hitting their lowest levels in six months, as the summer’s growing interest rates plateaued.
The overall market composite index dropped 2% after falling 3% a week ago, according to the Mortgage Bankers Association. On an unadjusted basis, the index decreased 3% from last week.
The purchase index declined 3% on a seasonally adjusted basis and 4% unadjusted for the week ending Aug. 10. It was also 3% lower year-over-year. The refinance index held steady from last week.
"Strong inflation was overshadowed by ongoing trade tensions between the U.S. and China, along with concerns over Turkey's currency situation," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "This helped push Treasury rates down by 3 basis points last week. The 30-year fixed rate decreased 3 basis points as well, but mortgage applications still decreased."
Adjustable-rate loan activity went down to 6.2% from 6.3% of total applications. The share of applications for Federal Housing Administration-guaranteed loans remained at 10.4% for the third straight week. Veterans Affairs-guaranteed loans stayed the same at 10.6%, while the U.S. Department of Agriculture/Rural Development maintained its 0.8% share.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) dropped 3 basis points to 4.81%. The average for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) also declined, to 4.73% from 4.74%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell 6 basis points to 4.77%. The average for 15-year fixed-rate mortgages actually increased, albeit slightly, going to 4.27% from 4.26%.
The average contract interest rate for 5/1 ARMs dipped to 4.06% from 4.07%.