Mortgage applications declined again during the week ended August 31, down 2.5 percent on a seasonally adjusted basis from a week earlier.  The Mortgage Bankers Association reported that its Market Composite Index, a measure of application volume, was down 3 percent on an unadjusted basis from the week ended August 24. 

The Refinancing Index also declined 3 percent from the previous week.  Both the Composite and the Refinancing Index have declined steadily since the week ended July 27 and applications for refinancing are now at the lowest level since May.  Refinancing made up a 79 percent share of mortgage applications, unchanged from the previous week but down from 81 percent in late July.

The Purchase Index decreased 0.8 percent on a seasonally adjusted basis.  The unadjusted Purchase Index was down 3 percent but was 1 percent higher than during the same period in 2011.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

Both contract interest rates and effective rates declined across the board.  The average rate for 30-year fixed rate mortgages (FRM) with conforming loan balances of $417,500 or less declined from 3.80 percent with 0.42 point to 3.78 percent with 0.37 point.  The jumbo version of the 30-year FRM was down one basis point to 4.05 percent with points decreasing to 0.32 from 0.34.  Thirty-year FRM backed by the FHA had an average interest rate of 3.54 percent with 0.44 points, down from 3.60 percent with 0.48 point.  The 15-year FRM rate slipped to 3.10 percent with 0.37 point from 3.12 percent with 0.44 point.

Rates for the 5/1 adjustable rate mortgages (ARMs) averaged 2.64 percent with 0.35 point compared to 2.68 percent with 0.36 percent the previous week.  The ARM share of mortgage applications increased to 5 percent during the week.

All rates provided by the MBA are for 80 percent loan-to-value ratio loans and points include the application fee.

MBA's weekly Mortgage Application Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.