Mortgage application volume fell for a third straight week during the week ended July 12, as the average rate for a 30-year fixed rate mortgage increased to 4.12%, up from 4.04%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Total volume decreased 1.1%.
In contrast to what typically happens when rates rise, applications for refinances increased 2%, while applications for purchases fell 4%.
Still, it should be noted that mortgage rates are hovering at around two-year lows. Applications for refinances were up 87% compared with the same week one year earlier.
The MBA notes that the previous week’s results included an adjustment for the Fourth of July holiday.
On an unadjusted basis, total volume increased 24% compared with the previous week. Applications for purchases increased 21% on an unadjusted basis and were 7% higher compared with the same week one year earlier.
“Mortgage rates increased across the board, with the 30-year fixed rate mortgage rising to its highest level in a month to 4.12 percent, which is still below this year’s average of 4.45 percent,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Coming out of the July 4th holiday, applications were lower overall, with purchase activity slipping almost four percent. Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA applications. Historically, government refinance activity lags slightly in response to rate changes.”
The refinance share of mortgage activity increased to 50.0% of total applications, up from 48.7% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 4.9% of total applications.