Despite lower rates, mortgage application volume fell 1.9% on an adjusted basis during the week ended July 19, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
It was the fourth consecutive week that total volume dropped.
Applications for refinances decreased 2% compared with the previous week while applications for purchases fell 2%.
On an unadjusted basis, total volume decreased 2% compared with the previous week. Applications for purchases decreased 1% on an unadjusted basis but were 6% higher compared with the same week one year earlier.
“Mortgage applications were down last week, even as rates moved lower across the board, with the 30-year fixed rate at 4.08 percent,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Refinance activity was lower, but we did see government refinance applications increase, driven solely by a 12 percent rise in FHA applications.
Kan adds that mortgage rates currently “are comparable to the average rate of 4.10 percent for June, but refinances last week were seven percent lower than last month. This is an indication that as we see rates lower for longer, borrowers need more of a drop in rates to consider refinancing.”
Kan points out that although purchase volume has been “somewhat volatile lately” it’s still up 6% compared with a year ago.
The refinance share of mortgage activity fell to 49.8% of total applications, down from 50.0% the previous week.
The adjustable-rate mortgage share of activity decreased to 4.7% of total applications.