Total mortgage application volume fell 4.8% during the week ended Sept. 25, with most of the dip resulting from a 7% decrease in applications for refinances, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for purchases decreased 2% compared with the previous week. The figures are adjusted to account for seasonal patterns.
Year-over-year, applications for refinances were up 52%, while applications for purchases were up 22%.
On an unadjusted basis, total volume decreased 5% compared with the previous week.
“Mortgage rates decreased last week, with the 30-year fixed rate mortgage declining five basis points to 3.05 percent – the lowest in MBA’s survey,” says Joel Kan, associate vice president of economic and industry forecasting for the association. “Despite the decline in rates, refinances fell over six percent, driven by a nine percent drop in conventional refinance applications.
“There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans, and that could explain last week’s decline in refinances,” Kan adds. “Many lenders are still operating at full capacity and working through operational challenges, ultimately limiting the number of applications they are able to accept.”
Kan says although purchase applications decreased last week, “activity was still at a strong year over-year growth rate of 22 percent. Even as pent-up demand from earlier in the year wanes, there continues to be action in the higher price tiers, with the average loan balance remaining close to an all-time survey high.”
The refinance share of mortgage activity decreased to 63.3%, down from 64.3% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.2%.