Mortgage applications fell slightly last week on a seasonally adjusted basis but fell sharply on an unadjusted basis the week of July 4. This week's results include an additional adjustment to account for the holiday.
The Mortgage Bankers Association announced that its Market Composite Index, a measure of mortgage application volume, fell 0.2% from the previous week on a seasonally adjusted basis, but was down 20.0% unadjusted.
The refinance index decreased 2.0% from the previous week but increased 28.0% compared to the same week a year ago. Refinances as a share of mortgage activity decreased from 35.7% of total applications to 34.9%.
The seasonally adjusted purchasing index increased 1.0 percent, while the unadjusted purchasing index fell 19.0 percent. The purchasing index was down 13.0 percent compared to the same week a year ago.
“The recent increase in mortgage rates has slowed demand. Mortgage applications were roughly flat last week as mortgage rates hovered around 7 percent,” said Joel Kang, MBA vice president and deputy chief economist. “Purchase activity increased slightly, primarily due to an increase in FHA and VA applications. Refinance applications declined for the fourth consecutive week in line with rising interest rates. Although home equity appreciation has been significant in recent years, most borrowers have little incentive to refinance at current interest rates.”
Data from the MBA's Weekly Mortgage Application Survey
Loan volumes declined again last week. The average loan amount was $369,900, down $5,000 from the average loan application from the previous week. Purchase loans declined further, from $434,200 to $425,100. The FHA share of total applications decreased from 13.1 percent to 12.5 percent, while the VA share increased from 12.9 percent to 13.7 percent. The USDA share of total applications increased from 0.3 percent to 0.4 percent. The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with loan balances below the conforming limit decreased from 7.03 percent to 7.00 percent, with points decreasing from 0.62 to 0.60. FHA-insured 30-year mortgage rates averaged 6.87 percent, down from 6.90 percent, a point decrease from 0.95 to 0.92. The average rate for 15-year fixed-rate mortgages was 6.63 percent, down 0.61 points, compared to 6.56 percent, down 0.54 points the week before. The cost of adjustable-rate mortgages (ARMs) decreased last week, with 5/1 ARMs at 6.22 percent, down 0.6 points, compared to 6.38 percent, down 0.54 points the week before. The rate of ARM applications increased to 6.2 percent from 6.0 percent the two weeks prior.