Despite lower mortgage rates, total mortgage application volume fell 3.1% on an adjusted basis during the week ended Aug. 30, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances dropped 7% compared with the previous week while applications for purchases increased 4%.
It was the third week in a row that total application volume fell on a week-over-week basis.
Still, as the MBA notes, applications for refinances were 152% higher compared with the same week one year earlier.
On an unadjusted basis, total volume fell 4% compared with the previous week. Applications for purchases increased 1% on an unadjusted basis and were 5% higher compared with the same week one year earlier.
“Ongoing trade tensions between the U.S. and China led to volatile, yet declining Treasury rates last week, causing the 30-year fixed mortgage rate to fall to its lowest level since November 2016,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Despite lower borrowing costs, refinances were down from their recent peak two weeks ago, but still remained over 150 percent higher than last August, when rates were almost a percentage point higher.”
Kan adds that while some consumers are acting on these lower rates, others are not due to the volatility in the market.
The refinance share of mortgage activity decreased to 60.4% of total applications, down from 62.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% of total applications.
The average rate for a 30-year fixed-rate mortgage, based on closings, was 3.87%, down from 3.94% the previous week.