Mortgage applications decreased 1.9% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 3.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 3% compared with the previous week. The Refinance Index decreased 3% from the previous week and was 4% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.2% from one week earlier. The unadjusted Purchase Index decreased 3% compared with the previous week and was 18% lower than the same week one year ago.
“Mortgage application volume fell last week to its lowest level since mid-July, as mortgage rates have stayed just above three percent for several weeks. Refinance volume has been moderating, while purchase volume continues to be lower than expected given the lack of homes on the market,” says Mike Fratantoni, MBA’s senior vice president and chief economist.
“Economic data has sent mixed signals, with slower job growth but a further drop in the unemployment rate in August,” adds Fratantoni. “We expect that further improvements will lead to a tapering of Fed MBS purchases by the end of the year, which should put some upward pressure on mortgage rates.”
The refinance share of mortgage activity remained unchanged at 66.8% of total applications from 66.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.5% of total applications.
The FHA share of total applications decreased to 10.9% from 11.2% the week prior. The VA share of total applications increased to 10.4% from 9.7% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03%, with points decreasing to 0.33 from 0.34 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.14% from 3.13%, with points increasing to 0.30 from 0.26 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.07% from 3.09%, with points increasing to 0.30 from 0.25 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.37% from 2.39%, with points decreasing to 0.26 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 2.56% from 2.80%, with points increasing to 0.17 from 0.13 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The survey covers over 75% of all U.S. retail residential mortgage applications.
Image: “San Francisco Houses” by Franco Folini is licensed under CC BY-SA 2.0