Mortgage applications dipped 1.4% for the week ending Aug. 15, offsetting some of the gains made in recent weeks, according to data from the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey.
A measure of mortgage loan application volume, the association’s Market Composite Index fell 1.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 2% compared with the previous week.
The MBA’s Refinance Index decreased 3% from the previous week, though it was 23% higher than the same week one year ago. The seasonally adjusted Purchase Index edged up 0.1% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week, and like refinances, purchase volume was 23% higher year over year.
Joel Kan, MBA’s vice president and deputy chief economist, attributed the downward weekly revision to slightly higher mortgage rates, with the 30-year fixed rate at 6.68%, according to MBA data.
“Applications were down as a result, driven by a 16% decrease in VA applications, which are typically a volatile segment of the market,” Kan stated in a review of the data. “[Federal Housing Administration] refinance applications increased over the week, as the FHA rate, at 6.39%, remained competitive relative to other loan types.”
Kan added purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace. Prospective homebuyers are still more active compared to last year, he said, despite uncertainty and affordability challenges.
Refinance activity decreased to 46.1% of total applications from 46.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.6% of total applications following the prior week’s spike to 9.6%. The FHA share increased to 19.1% from 18.4% the week prior. The Veterans Affairs share of total applications decreased to 13.4% from 14.2%. The U.S. Department of Agriculture share of total applications increased to 0.6% from 0.5%.
According to the MBA data, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $806,500 or less edged up to 6.68% from 6.67%, with points dipping to 0.6 from 0.64 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.
Contract interest rates for 30-year fixed-rate mortgages with jumbo loan balances greater than $806,500 decreased on average to 6.64% from 6.7%, with points increasing to 0.6 from 0.56 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.39% from 6.4%, with points decreasing to 0.66 from 0.77 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 5.96% from 5.93%, with points increasing to 0.7 from 0.63 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 6.01% from 5.8%, with points decreasing to 0.63 from 0.67 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
