Mortgage applications down again as refi activity keeps slowing
Mortgage application volume decreased 6.5%, falling for the second consecutive week with refinance activity at its lowest since early July, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Aug. 21 found that the refinance index decreased 10% from the previous week and was 34% higher than the same week one year ago. The refinance share of mortgage activity decreased to 62.6% of total applications from 64.6% the previous week.
"Mortgage rates were mixed last week, but the rates for 30-year fixed mortgages and 15-year fixed mortgages declined," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Despite the lower rates, conventional refinance applications fell 11% and government refinance applications fell 6%, which pushed the total refinance index to its lowest weekly level since July."
The last time refinance volume was lower was the week of July 3.
"The home purchase market remains a bright spot for the overall economy," Kan said. "Purchase applications were essentially unchanged, but were 33% higher than a year ago — the 14th straight week of year-over-year gains. Mortgage rates at record lows and households looking for more space are driving this summer's surge in demand."
The seasonally adjusted purchase index increased 0.4% from one week earlier, while the unadjusted purchase index decreased 2% compared with the previous week.
Adjustable-rate mortgage activity decreased to 2.6% from 2.7% of total applications, while the share of Federal Housing Administration-insured loan applications increased to 10.5% from 10.3% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 11.8% from 11.2% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased 2 basis points to 3.11%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate remained unchanged at 3.41%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged from 3.16%. For 15-year fixed-rate mortgages, the average decreased 3 basis points to 2.7%. The average contract interest rate for 5/1 ARMs increased to 3.14% from 2.95%.