A decline in refinancing pushed the volume of mortgage applications lower during the week ended August 26 according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The Survey's Market Composite Index which measures application volume was down 9.6 percent on a seasonally adjusted basis and 10 percent on an unadjusted basis from the previous week while the Refinance Index dropped 12.2 percent. The Purchase Index increased 0.9 percent on a seasonally adjusted basis but was down 1.3 percent unadjusted. The Purchase Index is 8.2 percent lower than it was one year ago.
The four-week moving averages rose for both the Market Index and the Refinance Index. The two seasonally adjusted measures rose 2.5 percent and 4.2 percent respectively while the Purchase Index decreased 2.8 percent.
The refinancing share of mortgage volume slipped from the record high 79.8 percent of all applications established last week to 77.8 percent in the current week. Adjustable rate mortgage activity increased to 7.1 percent from 6.2 percent.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) dropped to 4.32 percent from 4.39 percent while points including the origination fee increased from 0.88 to 1.30. The average rate for a 15-year FRM was down 7 basis points to 3.49 percent with points unchanged at 1.0. The effective rate for the 30-year FRM increased week-over-week while it decreased for the 15-year. All quotes are for 80 percent loan-to-value ratio loans.
"Accounting for the increase in average points paid, effective mortgage rates were little changed last week. Refinance application volume declined for a second week from recent highs, despite rates staying near a 10-month low, while purchase volume remained near 15-year lows," said Mike Fratantoni, MBA's Vice President of Research and Economics.
The MBA survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Base period and value for all indexes is March 16, 1990=100.
