Mortgage applications continued their modest downward track during the week ended August 19.  The Mortgage Bankers Association said its Market Composite Index, a measure of application volume, fell 2.1 percent on a seasonally adjusted basis from the previous week, the fourth out of five weeks it has declined.  The Index was down 3 percent on an unadjusted basis.

The share of applications that were for refinancing slipped to 62.2 percent from 62.6 percent and the Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index lost 0.3 percent and the unadjusted Purchase Index was down 2 percent compared with the week ended August 12.  Purchases were 8 percent higher than during the same week in 2015.

The FHA share of total applications was down to 8.9 percent from 9.6 percent while VA applications eased back from the previous week's 13.2 percent share to 12.4 percent. The USDA share of total applications remained at 0.6 percent.

Rates rose for all fixed-rate mortgages (FRM) on both a contract and an effective basis.  The average contract interest rate for 30-year FRM with conforming loan balances ($417,000 or less) increased to 3.67 percent from 3.64 percent.  Points rose to 0.34 from 0.31.

The jumbo version of the 30-year FRM jumbo loan, mortgages with balances greater than $417,000, increased to 3.62 percent from 3.60 percent.  Points averaged 0.35 compared to an earlier 0.28.  

FHA backed 30-year FRM had an average rate of 3.53 percent with 0.34 points.  The previous week the rate was 3.49 percent with 0.28 point

Rates for the 15-year FRM rose by 5 basis points to 2.95.  Points averaged 0.38 compared to 0.32 the prior week.  

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) was down slightly, from 2.85 percent the previous week to 2.84 percent.  Points, however, rose significantly, to 0.37 from 0.17, pushing the effective rate higher.  The ARM share of activity remained unchanged at 4.6 percent of total applications.

MBA's Weekly Mortgage Applications Survey is conducted among mortgage bankers, commercial banks, and thrifts.  The survey was initiated in 1990 and covers over 75 percent of all U.S. retail residential mortgage applications. Base period and value for all indexes is March 16, 1990=100 and interest rate information presumes loans with an 80 percent loan to value ratio and points that include the origination fee.