Rising interest rates dragged refinancing applications down 9 percent during the week ended August 17 according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.  Refinancing prompted 80.0 percent of mortgage applications received during the week compared to 81 percent during the week ended August 11.  The Home Affordable Refinance Program (HARP) accounted for 24 percent of refinancing activity, unchanged from the previous week.

The Market Composite Index, a measure of all mortgage application volume, was down 7.4 percent on a seasonally adjusted basis from the week before although it was up a slight 0.9 percent on an unadjusted basis.  The seasonally adjusted Purchase Index decreased 0.9 percent and was 3.0 percent higher than during the same week in 2011.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Both long and short term contract interest rates increased during the week as did the effective rate of all products.  The 30-year fixed-rate mortgage (FRM) had an average rate of 3.86 percent with 0.42 point compared to 3.76 percent with 0.47 point for loans with a conforming balance of $417,500 or less.  Jumbo 30-year FRM with balances above that amount saw an increase in the interest rate to 3.62 percent with 0.50 point from 3.53 percent with 0.49 point.

FHA-backed mortgages had an average rate of 3.62 percent compared to 3.53 percent.  Points increased from 0.49 to 0.50.

The rate for 15-year FRM increased 3 basis points to 3.15 percent with points increasing from 0.40 to 0.44.

Adjustable rate mortgages (ARM) had a 4.0 percent share of all mortgage applications during the week.  The hybrid 5/1 ARM had an average interest rate of 2.74 percent with 0.38 point compared to 2.73 percent with 0.36 point the previous week.

Interest rates quoted are for 80 percent loan-to-value mortgages and points include the application fee.

Data for the month of July showed the investor share of applications for home purchase was 5.7 percent, up from 5.5 percent in June and the share of purchase mortgages for second homes increased to 5.8 percent from 5.6 percent.

MBA's weekly survey has been conducted since 1990.  It covers 75 percent of all retail residential mortgage applications in the country.  Respondents include mortgage bankers, commercial banks, and thrifts.  Base value and period for the MBA indices is March 16, 1990 = 100.