Mortgage application volume fell 6.5% last week, driven mainly by a drop in applications for refinances, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
During the week ended August 21, applications for refinances decreased 10% while applications for purchases increased 0.4%.
The decrease in applications for refinances was due mainly to rising mortgage rates, which started to creep upward the previous week after hitting yet another all-time low the week prior to that.
The average rate for a 30-year fixed-rate mortgage was 3.11%, down from 3.13%, according to the MBA’s closing data.
Year-over-year, applications for refinances were up 34% while applications for purchases were up 33%.
On an unadjusted basis, total volume decreased 7% compared with the previous week.
“Mortgage rates were mixed last week, but the rates for 30-year fixed mortgages and 15-year fixed mortgages declined,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Despite the lower rates, conventional refinance applications fell 11 percent and government refinance applications fell 6 percent, which pushed the total refinance index to its lowest weekly level since July.
“The home purchase market remains a bright spot for the overall economy,” Kan adds. “Purchase applications were essentially unchanged but were 33 percent higher than a year ago – the 14th straight week of year-over-year gains. Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.”
The refinance share of mortgage activity decreased to 62.6% of total applications, down from 64.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 2.6% of total applications.
