The week ended August 3 marked the fourth consecutive one in which mortgage activity declined.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, was down 3.0 percent both before and after seasonal adjustment, and that the adjusted number reached its lowest level since January 2016.

The seasonally adjusted Purchase Index dropped for the fourth week as well.  It was down 2 percent from the week ended July 27.  The unadjusted Purchase Index was also down 2 percent, both from the previous week and from the same period in 2017.

The Refinance Index decreased 5 percent to its lowest level since December 2000. The share of applications for refinancing decreased to 36.6 percent of the total from 37.1 percent the previous week.


Refi Index vs 30yr Fixed



Purchase Index vs 30yr Fixed



The distribution of applications across loan products was essentially unchanged from a week earlier.  The FHA and USDA shares remained at their previous levels of 10.4 percent and 0.8 percent respectively and the VA share ticked up from 10.5 to 10.6 percent.

The direction of both contract interest rates and effective rates were mixed across loan products.  The average contract rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $453,100 was unchanged from the prior week at 4.84 percent.  Points were also unchanged at 0.45, leaving the effective rate unaffected.

The rate for jumbo 30-year FRM, mortgages with balances exceeding the conforming limit, decreased to 4.74 percent from 4.76 percent. Points rose to 0.39 from 0.37 and the effective rate was unchanged.

The average contract interest rate for 30-year FRM backed by the FHA increased by 5 basis points to 4.83 percent and points increased to 0.76 from 0.74.  The effective rate was also higher than the previous week.

Fifteen-year FRM had an average contract interest of 4.26 percent with 0.48 point.  The prior week the rate was 4.29 percent with 0.53 point.  The effective rate was down as well.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) declined 10 basis points to 4.07 percent while points jumped to  0.42 from 0.32.  The effective rate moved lower.  The ARM share of application activity decreased to 6.3 percent from 6.4 percent.

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 rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.