Last week's mortgage application activity was the best since early July as interest rates for most products drifted lower for the second week.  The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, rose 4.2 percent on a seasonally adjusted basis during the week ended August 17, the first positive reading in six weeks.  On an unadjusted basis, the Index gained 3 percent compared with the previous week.

Most of the increase came from a boomlet in refinancing. The Refinance Index was up 6 percent from the previous week and the share of applications that were for refinancing increased from 37.6 percent the previous week to 38.7 percent.

The seasonally adjusted Purchase Index rose by 3 percent and the unadjusted version increased 1 percent from both the previous week and from the same week in 2017.


Refi Index vs 30yr Fixed



Purchase Index vs 30yr Fixed



The FHA share of total applications decreased to 10.2 percent from 10.4 percent the previous week and the VA share ticked down to 10.5 percent from 10.6 percent.  USDA-backed loans had an 0.7 percent share, down from 0.8 percent during the week ended August 3.

Contract interest rates were mixed, but generally lower than a week earlier. The average rate for 30-year fixed-rate mortgages (FRM) with origination balances at or below the conforming limit of $453,100 was  unchanged at 4.81 percent.  Points declined 0.42 from 0.43 and the effective rate was also unchanged.

Jumbo 30-year FRM, loans with balances above the conforming limit, had an average rate of 4.68 percent with 0.28 point.  The previous rate was 4.73 percent with 0.29 point.  The effective rate was also lower.

Both contract and effective rates for FHA-backed 30-year FRM moved higher. The average rate increased 5 basis points to 4.82 percent and points rose to 0.69 from 0.68.

Fifteen-year FRM had an average rate of 4.25 percent with 0.47 point.  A week earlier the rate was 4.27 percent with 0.52 point. The effective rate decreased from the prior week.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) fell to 4.00 percent from 4.06 percent, with points increasing to 0.52 from 0.48 and the effective rate declined. The ARM share of applications increased from 6.2 percent to 6.5 percent of total applications.

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.