After increasing the previous two weeks, mortgage application volume dipped 0.9% on an adjusted basis during the week ended Aug. 16, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The previous week, applications jumped an impressive 21.7%, driven mainly by a 37% increase in applications for refinances that was driven by lower rates.
This past week, however, applications for refinances increased only 0.4% compared with the previous week.
Still, applications for refinances were up 180% compared with the same week one year earlier.
Applications for purchases decreased 4% compared with the previous week.
On an unadjusted basis, total volume decreased 2% compared with the previous week.
Applications for purchases decreased 5% on an unadjusted basis but were up 5% compared with the same week one year earlier.
“In a week where worries over global economic growth drove U.S. Treasury yields 13 basis points lower, the 30-year fixed mortgage rate decreased just three basis points,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “As a result, the refinance index saw only a slight increase but remained at its highest level since July 2016. The small moves in rates and refinancing are potentially signs that lenders may be approaching capacity constraints as they continue to deal with the largest wave of refinance activity in three years. The refinance share of applications, at almost 63 percent, was also at its highest level since September 2016.”
Kan adds that lower mortgage rates “have yet to lead to a notable rise in homebuyer demand.”
The refinance share of mortgage activity increased to 62.7% of total applications, up from 61.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.4% of total applications.
The average rate for a 30-year fixed-rate mortgage, based on closings, was 3.90%, down from 3.93%.
The average rate for a 5/1 ARM was 3.35%, down from 3.43%.