The volume of applications increased slightly during the week ended August 26 as mortgage rates made minor changes and moved in both directions. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, a measure of application activity, was 2.8 percent higher on a seasonally adjusted basis than during the week ended August 19, and rose 2.0 percent unadjusted.
After two weeks of decreasing volume the Refinancing Index rose 4.0 percent. The share of applications for refinancing increased from 62.4 percent the prior week to 63.5 percent. It was the fourth straight week that the share of refinancing increased.
The Purchase Index increased 1 percent on a seasonally adjusted basis from one week earlier but fell by 1 percent when unadjusted. Purchasing applications were up by 5 percent compared to the same week in 2015.
The FHA share of total applications increased to 9.7 percent from 8.9 percent the previous week and the VA share ticked up to 12.5 percent from 12.4 percent. USDA applications retained the 0.6 percent share of applications held a week earlier.
The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) was unchanged at 3.67 percent. Points dipped to 0.33 from 0.34, lowering the effective rate.
The jumbo version of the 30-year FRM (balances larger than $417,000) saw a 1 basis point increase in its average contract rate to 3.63 percent. Points eased back to 0.27 from 0.35 and the effective rate declined.
There was a slight increase in the contract rate for FHA-backed 30-year FRM, from 3.53 percent with 0.34 point to 3.54 percent with 0.36 point. The effective rate increased from last week.
The rate for 15-year FRM also gained 1 basis point to an average of 2.96 percent. Points however points dropped from 0.38 to 0.31, bringing the effective rate down.
The share of applications for adjustable rate mortgages (ARMs) continues to drift down and was at 4.5 percent last week. The average contract interest rate for 5/1 ARMs increased to 2.90 percent from 2.84 percent, with points decreasing to 0.24 from 0.37. The effective rate increased from the prior week.
MBA's Weekly Mortgage Applications Survey covers over 75 percent of all U.S. retail residential mortgage applications. It has been conducted since 1990, polling respondents that 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 80 percent loan-to-value ratio and points that include the origination fee.