According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 1, mortgage applications decreased 2.9% from one week earlier.
The Refinance Index decreased 5% from the previous week and was 30% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week.
“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates,” says Joel Kan, MBA’s vice president and deputy chief economist. “Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines.
“The 30-year fixed mortgage rate decreased to 7.21% last week, but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market. The refinance index dropped to its lowest level since January 2023, driven by a 6% decline in conventional refinances.”
The refinance share of mortgage activity decreased to 30.0% of total applications from 30.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.7% of total applications.
The FHA share of total applications increased to 13.7% from 13.2% the week prior. The VA share of total applications decreased to 11.3% from 11.6% the week prior. The USDA share of total applications increased to 0.6% from 0.4% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 7.03 percent from 7.10 percent, with points decreasing to 0.95 from 1.09 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
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