Mortgage application activity was listless as summer unofficially ended and the nation prepared for the Labor Day weekend.  Changes during the week ended September 2 were minor and moved in both directions depending on whether seasonality entered the picture or not.

The Mortgage Bankers Association said its Market Composite Index, a measure of applications volume, rose 0.9 percent on a seasonally adjusted basis from the week ended August 2 but was down 0.1 percent when unadjusted.  The same yin and yang prevailed with the Purchase Index which rose 1 percent when adjusted and fell 1 percent unadjusted.  On a year-over-year basis the Purchase Index was up 7 percent.

The Refinancing Index increased 1 percent and the market share of refinancing activity increased to 64.0 percent of total applications from 63.5 percent the previous week.

Applications for FHA mortgages accounted for 9.5 percent of the total, down from 9.7 percent the previous week and the VA share eased back to 11.9 percent from 12.5 percent.  The USDA share of total applications remained unchanged at 0.6 percent.

Mortgage interest rate movement was similarly subdued.  Changes were slight and the direction mixed on both a contract and an effective basis.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) increased to 3.68 percent from 3.67 percent, with points moving to 0.37 from 0.33. The effective rate was also higher than during the week ended August 26.

The average rate for 30-year FRM with jumbo loan balances (greater than $417,000) moved up 3 basis points to 3.66 percent and points rose to 0.30 from 0.27.  The effective rate increased from the prior week.

FHA-backed 30-year FRM had an average rate of 3.52 percent with 0.35 points.  A week earlier the rate was 3.54 percent with 0.36 point.  The effective rate also declined.

The average contract interest rate for 15-year FRM was unchanged at 2.96 percent, with points increasing to 0.34 from 0.31. The effective rate was also unchanged.

The share of adjustable rate mortgages (ARMs) continued to shrink, dwindling to 4.3 percent of total applications from 4.5 percent. The average rate for 5/1 ARMs decreased to 2.87 percent from 2.90 percent, with points increasing to 0.30 from 0.24     The effective rate decreased week-over-week. 

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