Applications for refinancing fell again during the week ended August 16 the Mortgage Bankers Association (MBA) said today.  MBA' Refinancing Index, a measure of application volume, fell 8 percent from the previous week and was down 62.1 percent from its recent peak reached during the week of May 3, 2013.  Refinancing as a share of mortgage activity dropped another percentage point during the week to 62 percent.

Refinance Index vs 30 Yr Fixed

Overall mortgage applications as reflected in MBA's Market Composite Index, decreased 4.6 percent on a seasonally adjusted basis and 5 percent on an unadjusted basis.  The seasonally adjusted Purchase Index increased 1 percent and the unadjusted index was down 0.4 percent from the week ended August 9.  The unadjusted Purchase Index was 5 percent higher than in the same week one year ago.

Purchase Index vs 30 Yr Fixed

Both contract and effective interest rates increased during the week with most of the contract rates up by double digits.  The average contract rate for 30-year fixed-rate mortgages (FRM) with conforming balances of $417,000 or less rose 12 basis points to 4.68 percent with points increasing to 0.42 from 0.39.  The contract rate for jumbo 30-year FRM with balances over that amount rose to 4.74 percent with 0.28 point from 4.57 percent with 0.25 point.   The 15-year FRM had an average rate of 3.71 percent with 0.32 point, up from 3.60 percent with 0.35 point.

Thirty-year FRM backed by the FHA had average contract rates of 4.40 percent compared to 4.25 percent a week earlier.  Points decreased to 0.21 from 0.30. 

The market share of adjustable rate mortgages (ARMs) increased slightly during the week to 6 percent.  The average contract rate for the most popular version of the ARM, the 5/1 hybrid, increased to 3.36 percent with 0.48 point from 3.44 percent with 0.37 point. 

MBA derives interest rate and application volume information from a weekly survey of mortgage bankers, commercial banks and thrifts that covers over 75 percent of all U.S. retail mortgage applications.  Interest rate information is for loans with 80 percent loan-to-value ratios and points include the origination fee.  The survey has been conducted since 1990 and the base period and value for all indexes is March 16, 1990=100.