Demand for purchase loans inched up for the third straight week at the end of July, but was still down nearly 34 percent from a year ago, the Mortgage Bankers Association said in releasing the results of its Weekly Mortgage Applications Survey.
Demand for purchase loans was up a seasonally adjusted 1.5 percent during the week ending July 30, while applications for refinancings rose 1.3 percent from the previous week.
The growing demand for purchase loans was driven by a 3.4 percent increase in applications for FHA and other government-backed loans. Demand for conventional loans was essentially flat, the MBA said.
When not adjusted for seasonal factors, the survey showed demand for purchase loans up 7.1 percent from a week ago, but down 33.7 percent from the same time a year ago.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.6 percent from 4.69 percent, with points increasing to 0.93 from 0.88 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03 percent from 4.12 percent, with points increasing to 1.01 from 0.83 (including the origination fee) for 80 percent LTV loans. This is the lowest 15-year contract rate ever recorded in the survey. The effective rate also decreased from last week.
The average contract interest rate for one-year ARMs decreased to 7.1 percent from 7.15 percent, with points decreasing to 0.21 from 0.23 (including the origination fee) for 80 percent LTV loans.