Mortgage applications fell 6.5 percent from the previous week in the week ending August 21, but continued to rise compared to a year ago, according to a weekly survey from the Mortgage Bankers Association (MBA).
MBA’s Market Composite Index, which measures mortgage loan application volume, decreased 6.5 percent on a seasonally adjusted basis from one week earlier and dropped 7 percent on an unadjusted basis, MBA said in a press release. Refinances accounted for 62.6 percent of total application activity, down slightly from 64.6 percent the week before. The trade group’s Refinance Index declined 10 percent from the previous week but increased by 34 percent compared to the same week one year ago.
MBA’s seasonally adjusted Purchase Index remained essentially flat from one week earlier, up 0.4 percent. Unadjusted, the index was down 2 percent week over week, but up 33 percent year over year.
“Mortgage rates were mixed last week, but the rates for 30-year fixed mortgages and 15-year fixed mortgages declined. 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,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting, in a statement.
“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. Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.”
According to the survey, which covers more than 75 percent of all U.S. retail residential mortgage applications, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $510,400 or less fell slightly to 3.11 percent from 3.13 percent with points rising to 0.38 from 0.36 (including the origination fee) for loans with an 80 percent loan-to-value ratio.
The average rate for 30-year fixed-rate mortgages with jumbo loans stayed the same at 3.41 percent while the average rate for 30-year fixed-rate loans backed by the Federal Housing Administration (FHA) also remained unchanged at 3.16 percent.
For 15-year fixed-rate mortgages, the average contract interest rate dropped to 2.70 percent from 2.73 percent, with points inching up to 0.39 from 0.36 (including the origination fee) for 80 percent LTV loans, the survey said.
FHA loan applications rose to 10.5 percent of application activity from 10.3 percent the week before and loans backed by the U.S Department of Veterans Affairs (VA) also rose to 11.8 percent of application activity, up from 11.2 percent the week before.