Mortgage Applications Fell For Third Straight Week

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Mortgage applications fell for a third consecutive week, despite a substantive decrease in fixed mortgage rates.

Total volume dropped 2.5% during the week ended Feb. 1, while the average rate for a 30-year fixed-rate mortgage decreased to 4.69%, down from 4.76% the previous week, according to the Mortgage Bankers Association’s Weekly Applications Survey.

Applications for refinances increased 0.3% while applications for purchases decreased 5%.

On an unadjusted basis, total volume increased 12% compared with the previous week, which included the Martin Luther King holiday. Applications for purchases increased 13% on an unadjusted basis but were down 2% compared with the same week one year earlier.

“Mortgage rates for all loan types declined last week, with the 30-year fixed mortgage rate falling seven basis points to 4.69 percent – the lowest rate since April 2018,” says Joel Kan, associate vice president of industry surveys and forecasts for the MBA, in a statement. “Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost two percent lower than a year ago. However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward.”

Kan adds that “refinance applications saw a very slight increase compared to the previous week, despite the broad decline in rates.”

The refinance share of mortgage activity decreased to 41.6% of total applications, down from 42.0% the previous week.

The adjustable-rate mortgage (ARM) share of activity decreased to 7.8% of total applications.

The average rate for a 5/1 ARM, based on closings, was 4.04%, down from 4.14%.

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