For the second week in a row, stock market volatility impacted the home purchase market, driving applications for these loans to their lowest level since December 1996 and resulting in the total number of applications received to fall by 2.4% on a seasonally adjusted basis for the week ended Aug. 19, according to the Mortgage Bankers Association.
The seasonally adjusted Purchase Index fell 5.7% from the previous week. On an unadjusted basis, the Purchase Index is 7.3% lower than the same week in 2010. The Refinance Index fell by 1.7% from the previous week.
Michael Fratantoni, MBA's vice president of research and economics, said "Another week of volatile markets and rampant uncertainty regarding the economy kept prospective homebuyers on the sidelines. This decline impacted borrowers across the board, with purchase applications for jumbo loans falling by more than 15%, and purchase applications for the government housing programs (FHA, VA, and USDA) falling by 8.2%. Although mortgage rates remain quite low, they increased over the week, bringing refinance application volumes down slightly."
The market share of refi applications increased to 79.8% from 78.8% one week prior. MBA tracks activity through its proprietary application index.
The average contract interest rate for 30-year fixed-rate mortgages was up 7 basis points to 4.39% from 4.32%. Points increased to 0.88 from 0.86 (including the origination fee) for 80% loan-to-value ratio loans.
For the first time in three weeks, the average contract interest rate for the 15-year FRM moved up from its lowest recorded level, increasing basis points to 3.56% from 3.47%. Points decreased to 1.00 from 1.08.
