Fewer borrowers chose to take out loans for home purchases and refinancings last week even as long-term mortgage rates ended a monthlong climb, the Mortgage Bankers Association reported today.
The drop-off in activity pushed the market composite index — a measure of mortgage application volume — down 3.4 percent on a seasonally adjusted basis from the week before.
Applications for refinancings declined 4.2 percent from the first week of June, and the index that tracks home purchases was down 3 percent.
Borrowing costs on long-term loans were fairly calm in the latest survey, with the average contract interest rate for 30-year fixed-rate mortgages dipping to 6.6 percent from 6.61 percent a week earlier and the average rate on the 15-year fixed holding at 6.28 percent.
Costs on the one-year ARM, however, jumped from 5.48 percent to 5.7 percent during the period, boosting the ARM share of total applications to 20.3 percent from 18.7 percent a week earlier. The refi share of activity held at 38 percent, MBA reported.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.58 on the 30-year loans, 1.42 on the 15-year, and 1.16 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.