Following four straight weeks of gains, mortgage application volume dipped 0.8% on an adjusted basis during the week ended July 24, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances dipped 0.4% compared with the previous week but were up 121% compared with a year ago.
Applications for purchases fell 2% compared with the previous week but were up 21% compared with a year earlier.
On an unadjusted basis, total volume decreased 1% compared with the previous week.
The average rate for a 30-year, fixed-rate mortgage was unchanged at 3.20%
“Mortgage rates remained near record lows for conventional loans last week, and refinances in the conventional sector continued to slightly increase,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “However, rates on FHA loans rose, leading to an almost 18 percent drop in FHA refinances.
“Homebuyers stepped back slightly, and there was a larger drop in purchase application volume for FHA, VA, and USDA loans,” Fratantoni continues. “This trend, along with the fact that average loan sizes are increasing, indicate that prospective first-time buyers are being impacted more by the rising economic stress caused by the resurgence in COVID-19 cases, as well as the uncertainty on how the next round of government support will take shape.”
The refinance share of mortgage activity increased to 65.1% of total applications, up from 64.8% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 3.2% of total applications.