The Mortgage Bankers Association, (MBA) says its Weekly Mortgage Application Survey for the week ended August 19 shows the volume of mortgage applications slipping another notch. MBA’s Market Composite Index decreased 1.2 percent on a seasonally adjusted basis from one week earlier and 3 percent on an unadjusted basis. The Refinance Index decreased 3 percent from the previous week and was 83 percent lower than the same week one year ago. The refinance share of total applications was 31.1 percent compared to 31.2 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index lost 1 percent and the unadjusted version declined 2 percent from the prior week. Purchase volume was down 21 percent year-over-year. [purchaseappschart] “Mortgage applications continued to remain at a 22-year low, held down by significantly reduced refinancing demand and weak home purchase activity ” according to Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Last week’s purchase results varied, with conventional applications declining 2 percent and government applications increasing 4 percent, which is potentially a sign of more first-time homebuyer activity. “The average purchase loan size continued to trend lower, as purchase activity at the high end of the market is weakening,” Kan said. “Mortgage rates increased for all loan types last week, with the benchmark 30-year fixed rate jumping 20 basis points to 5.65 percent – the highest in nearly a month. The spread between conforming fixed-rate loans and ARM loans narrowed to 84 basis points from over 100 basis points the prior week. This movement made fixed rate loans relatively more attractive than ARMs, thereby reducing the ARM share further from highs seen earlier this year.”
Source: Mortgage News Daily