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.
