The volume of refinancing applications, shored up by interest rates that remained at seven- and eight- month lows, rose for the fifth time in the last six weeks.  However, during the week ended August 18, the gain was a marginal one, not enough to keep the overall level of applications from declining.  The Mortgage Bankers Association said its Market Composite Index, a measure of that volume, was down 0.5 percent on a seasonally adjusted basis, and lost 2.0 percent before adjustment, when compared to the week ended August 11. 

The Refinancing Index moved higher, but only by a scant 0.3 percent.  The refinancing share of applications rose to 48.7 percent from 47.8 percent, the third straight week that share gained ground.

The Purchase Index declined by 2 percent on a seasonally adjusted basis and the unadjusted Index fell 3.0 percent compared to the previous week.  The seasonally adjusted Purchase Index hit a seven-year high during the week ended June 2 (a holiday-adjusted week) and has declined in all but three of the 11 weeks since. The unadjusted index was 9.0 percent higher than during the same week in 2016.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

Applications for FHA mortgages decreased to 10.1 percent from 10.2 percent and the VA share decreased to 10.2 percent from 10.5 percent.  USDA loan applications again received an 0.8 percent share.

Mortgage rates were essentially flat during the week; most changes in contract rates were to the low side.  Effective rates were mixed.  

The contract rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less was unchanged at 4.12 percent.  Points increased to 0.39 from 0.38, leaving the effective rate unchanged as well. 

Thirty-year FRM with jumbo loan balances higher than the $424,100 conforming limit had an average rate of 3.99 percent versus 4.04 percent the week before.  Points decreased to 0.26 from 0.27 and the effective rate was down.    

Rates for mortgages backed by the FHA were the only ones to move higher. The average rate for the 30-year FRM ticked up to 4.02 percent from 4.01 percent, with points decreasing to 0.37 from 0.40.  The effective rate remained unchanged.

There was a 1 basis point decrease in the average interest rate for 15-year FRM, to 3.40 percent. Points rose to 0.38 from 0.35, and the effective rate was unchanged. 

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.27 percent with 0.31 point from 3.34 percent with 0.29 point.  The effective rate declined.  The ARM share of activity decreased to 6.4 percent of total applications from 6.6 percent the prior week.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.