Mortgage Applications Down Again in MBA Weekly Survey

Mortgage applications fell for the second straight week amid little movement in interest rates, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending August 21. 

The Market Composite Index decreased by 6.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 7 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 10 percent from the previous week but was 34 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 62.6 percent of total applications from 64.6 percent the previous week.

The seasonally adjusted Purchase Index increased by 0.4 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent compared to the previous week and was 33 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.5 percent from 10.3 percent the week prior. The VA share of total applications increased to 11.8 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

“Mortgage rates were mixed last week, but the rates for 30-year fixed mortgages and 15-year fixed mortgages declined,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite the lower rates, conventional refinance applications fell 11 percent and government refinance applications fell 6 percent, which pushed the total refinance index to its lowest weekly level since July.”

Kan noted the home purchase market remains a bright spot for the overall economy. “Purchase applications were essentially unchanged but were 33 percent higher than a year ago – the 14th straight week of year-over-year gains,” he said. “Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.”  

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.11 percent from 3.13 percent, with points increasing to 0.38 from 0.36 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) remained unchanged at 3.41 percent, with points remaining unchanged at 0.35 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA remained unchanged from 3.16 percent, with points increasing to 0.29 from 0.27 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.70 percent from 2.73 percent, with points increasing to 0.39 from 0.36 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 3.14 percent from 2.95 percent, with points increasing to 0.42 from 0.41 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 2.6 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.