Overall home loan application volume continued to fall last week, impacted by another drop in refinancing activity, the Mortgage Bankers Association reported today.
The market composite index, a measure of mortgage application volume, dipped 0.2 percent, falling to 671 last week on a seasonally adjusted basis from 672.1 the week before.
Borrowers decided to buy last week instead of refinance, as the index that tracks home purchases edged up 0.1 percent from mid-month while the refinance index lost 0.5 percent.
Both refis and adjustable-rate mortgages (ARMs) continued to lose market share, with refis dropping to 45.1 percent of total applications and ARMs slipping to 20.2 percent.
Borrowing costs across all loan types were also down, as the average contract interest rate on the 30-year fixed-rate mortgage fell to 6.04 percent, the 15-year fixed-rate dropped to 5.77 percent, and the one-year ARM decreased to 5.84 percent.
Points, which are loan-processing fees expressed as a percent of the total loan amount, averaged 1.33 on the 30-year loans, 1.14 on the 15-year, and 0.72 on one-year ARMs. Statistics, which include the origination fee, are based on loan-to-value ratios of 80 percent.
The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.