Cruel summer continues as rates, applications barely budge

Lenders are sweating out the dog days of summer as state rates continue to keep buyers at bay.

Total application volume fell 3.8% last week compared to the prior seven days, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. Both purchase and refinance demand stepped back with average 30-year fixed-rate mortgage rates ticking down last week by just 1 basis point to 6.83%.

"There is still plenty of uncertainty surrounding the economy and job market, which is weighing on prospective homebuyers' decisions," said Joel Kan, the trade group's vice president and deputy chief economist, in a press release. 

The results come a week after the MBA downgraded its year-end origination forecast, citing wavering demand with ongoing economic uncertainty. Wednesday's figures also come on the eve of the Federal Open Market Committee meeting, in which economists anticipate the central bank to stand pat on much-desired rate cuts. 

The MBA's Refinance Index fell 1%, but remains 30% higher than the same week a year ago. On an unadjusted basis, purchase volume was down a larger 6% week-over-week, and just 17% higher than a year ago.

How product mix and mortgage rates moved

Effective mortgage contract interest rates also changed little on a weekly basis, erasing some opportunity for the market watching slowing home price growth and inventory reaching a six-year high. 

• The average 30-year FRM for jumbo loans fell 1 basis point to 6.74%;
• The average 30-year Federal Housing Administration rate rose 4 basis points to 6.56%;
• The average 15-year FRM dropped 2 basis points to 6.12%;
• The average 5/1 adjustable rate mortgage jumped 21 basis points to 6.22%.
  

The share of refinance activity was relatively flat last week, making up 40.7% of applications. FHA loans and Department of Veterans Affairs-backed mortgages also accounted for similar shares of the market, at 18.8% and 12.2%, respectively. 
The percentage of mortgage customers seeking U.S. Department of Agriculture loans meanwhile were unchanged at 0.6%.