August ended with a slight decline in mortgage applications and a modest increase in the market share of refinances, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 31.
The Market Composite Index, a measure of mortgage loan application volume, showed a 0.1 percent drop on seasonally adjusted basis from the previous week. That decline was 2 percent on an unadjusted basis.
Refinances claimed a larger share of the mortgage market, accounting for 38.9 percent of total applications compared with 38.7 percent the previous week. However, the Refinance Index declined 1 percent during that time. The adjustable-rate mortgage (ARM) activity share dropped to 6.1 percent of total applications.
The Purchase Index offered a mix a good and bad news. The index increased 1 percent from the previous week on a seasonally adjusted basis while the unadjusted index dropped 2 percent, but still was 2 percent higher than the same week one year prior.
The share of total applications for mortgages backed by the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) and the U.S. Department of Agriculture (USDA) saw relatively little or no change from the previous week, with VA applications seeing the biggest week-to-week difference. The FHA application share remained steady at 10.2 percent, VA loan applications decreased to 10 percent from 10.5 percent the week prior and the USDA increased to 0.8 percent from 0.7 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.8 percent from 4.78 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate did not change from the previous week.
For 15-year fixed-rate mortgages, the average contract interest rate decreased to 4.23 percent from 4.24 percent, with points decreasing to 0.45 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from the week before.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) decreased to 4.67 percent from 4.68 percent, with points remained unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA also went up , rising to 4.79 percent from 4.77 percent, with points decreasing to 0.69 from 0.75 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from the preceding week.
The average contract interest rate for 5/1 ARMs increased to 4.09 percent from 3.95 percent, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from the previous week.