Mortgage application activity declined for the fifth consecutive period during the week ended July 26.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, decreased 1.4 percent on a seasonally adjusted basis compared to the previous week and was down 1 percent on an unadjusted basis.

The Purchase Index was also down, falling by three percent on both a seasonally adjusted and an unadjusted basis.  It remained, however, 6 percent higher than during the same week in 2018.

Refinancing still showed a little bit of life. That index eked out a gain of 0.1 percent compared to the week ended July 19 and was 84 percent higher than a year earlier. The share of applications that were for refinancing inched up to 50.5 percent from 49.8 percent the prior week.


Refi Index vs 30yr Fixed



Purchase Index vs 30yr Fixed




Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting said, "Mortgage applications were lower last week, driven by a 3 percent decrease in purchase applications. While purchase activity was still up 6 percent from a year ago, the index has now decreased for three straight weeks and reached its lowest point since March. Despite healthy demand, inadequate supply levels continue to hold back some would-be buyers.

"Rate movements were mixed," he said, "with the 30-year fixed rate remaining unchanged (at 4.08 percent), but the FHA rate decreasing to its lowest level since 2017 to 3.94 percent." 

Added Kan, "Refinance applications were essentially flat, but the components told different stories. Conventional refinances were up 1.1 percent, but government refinances were down almost 3 percent - led by a drop in VA applications." 

The average loan size during the week was $317,800. Purchase loans averaged $322,100.

The FHA share of total applications was unchanged at 11.3 percent from the previous week while the VA share decreased to 12.6 percent from 13.1 percent.  The USDA share stayed at 0.6 percent.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $484,350 was unchanged at 4.08 percent.  Points increased to 0.34 from 0.33 and the effective rate was unchanged from the previous week.  

The jumbo version of the 30-year FRM, loans with balances higher than the conforming limit, retained the same contract rate as the previous week, 4.04 percent.  Points dipped to 0.22 from 0.25 and the effective rate moved lower.

The average contract interest rate for 30-year FRM backed by the FHA decreased to 3.94 percent, the lowest level since September 2017, with 0.29 point. The prior week the rate was 3.98 percent with 0.31 point. The effective rate declined.

Fifteen-year FRM had an average rate of 3.48 percent, up 3 basis points from the prior week. Points dropped from 0.32 to 0.26 and the effective rate moved higher.  

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 3.52 percent from 3.57 percent, with points increasing to 0.31 from 0.27. The effective rate decreased from last week. The ARM share of applications was unchanged at 4.7 percent.

MBA's Weekly Mortgage Applications Survey been conducted since 1990 and covers over 75 percent of all U.S. retail residential 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.