Despite interest rates that were lower across the board mortgage applications activity sagged during the week ended July 29.  The Mortgage Bankers Association (MBA) said its Market Composite Index and all of its components were down from levels during the week ended July 22.

The Composite Index itself decreased by 3.5 percent on a seasonally adjusted basis from the previous week and was down 4.0 percent unadjusted. It was the third consecutive week that the seasonally adjusted Composite was lower. The Refinancing Index was also down 4.0 percent and the share of applications that were designated for refinancing fell from 61.1 percent to 60.7 percent.

The Purchase Index was 2 percent lower than a week earlier on a seasonally adjusted level and reached the lowest level since February.  The unadjusted Purchase index was down 2 percent as well but remained 6 percent higher than during the same week in 2015.  The seasonally adjusted Government Purchase Index retreated to its lowest level since November 2015.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

The FHA share of total applications decreased to 9.4 percent from 10.1 percent the previous week while the VA share rose to 12.1 percent from 11.9 percent and the USDA share ticked up to 0.7 percent from 0.6 percent. 

All fixed rate mortgages (FRM) had a lower average rate compared to the previous week on both a contract and, with the exception of the 15-year FRM, on an effective basis.  The average contract rate for 30-year FRM with conforming loan balances ($417,000 or less) decreased to 3.67 percent from 3.69 percent, with points decreasing to 0.30 from 0.36

The jumbo version of the 30-year FRM (loan balances in excess of $417,000) had a contract rate of 3.65 percent with 0.24 point.  The previous week the rate was 3.67 percent with 0.32 point.

There was a 2 basis point decline in the rate for 30-year FRM backed by the FHA to an average of 3.54 percent.  Points decreased to 0.32 from 0.35  

Fifteen-year FRM had a rate of 2.93 percent, one basis point lower than the previous week.  Points increased to 0.36 from 0.32 leaving the effective rate unchanged.

There was no change from the previous week in the share of applications for adjustable rate mortgages (ARMs); they continued to constitute 4.7 percent of the total number. The average contract interest rate for 5/1 ARMs decreased to 2.90 percent from 2.96 percent, with points decreasing to 0.24 from 0.30.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rates are quoted on the basis of loans with an 80 percent loan-to-value ratio and points that include the origination fee.