Mortgage Applications Fell as Mini Refinance Boom Lost Some Steam

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Mortgage application volume fell 6.2% on an adjusted basis during the week ended August 23, with most of the decrease coming from an 8% drop in applications for refinances, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.

Still, applications for refinances were 167% higher compared with the same week one year earlier.

Applications for purchases decreased 4% compared with the previous week.

On an unadjusted basis, total volume fell 7%. Applications for purchases decreased 6% on an unadjusted basis but were 2% higher compared with the same week one year earlier.

“U.S. Treasury yields were volatile over the course of the week, as the ongoing trade dispute between the U.S. and China continued to generate uncertainty among investors,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Rates increased for the first time since the week of July 12, but were still 80 basis points lower than the beginning of the year.

“Purchase applications were still up around 2 percent year-over-year, but the drop in rates this summer have not yet led to a significant boost in activity,” Kan adds. “Uncertainty over the near-term economic outlook and low supply continue to be the predominant headwinds for prospective homebuyers.”

The refinance share of mortgage activity fell to 62.4% of total applications, down slightly from 62.7% the previous week.

The adjustable-rate mortgage (ARM) share of activity decreased to 6.1% of total applications.

The average rate for a 30-year fixed-rate mortgage, based on closings, was 3.94%, up slightly from 3.90% the previous week.

The average rate for a 5/1 ARM was 3.42%, up from 3.35%.

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