MBA: Mortgage applications post quiet week

Applications slightly dip

Mortgage applications recorded another quiet week despite record low-interest rates and it being one of the busiest housing seasons of the year.

Let’s paint the picture.

New home sales, which came out on Tuesday morning, recorded the biggest July gain since the housing bust, keeping up the strong pace witnessed in June.

The most recent jobs report for July beat expectations, showing continued improvement in the labor market.  

And most notably, on top of all this, mortgage rates continue to stay well-below 4%. According to the most recent mortgage rate report from Freddie Mac, mortgage rates have ranged between 3.41% and 3.48% for eight consecutive weeks.

Yet, looking at the newest data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Aug 19, the market is trudging along, with mortgage applications decreasing 2.1% from one week earlier.

And this is only the latest report in a series of up and down application reports from the MBA.

Broken up, the Refinance Index decreased 3% from the previous week. In comparison, the seasonally adjusted Purchase Index barely dipped, falling 0.3% from one week earlier.

As a whole, the refinance share of mortgage activity decreased to 62.4% of total applications from 62.6% the previous week. The adjustable-rate mortgage share of activity stayed at 4.6% of total applications.

The Federal Housing Administration’s share of total applications decreased to 8.9% from 9.6% the week prior, as the Veteran Affairs’ share of total applications decreased to 12.4% from 13.2% the week prior. The United States Department of Agriculture’ share of total applications stayed frozen at 0.6%.

Here’s how mortgage rates varied based on product type:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.67% from 3.64%.
  • In addition, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.62% from 3.60%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA marginally increased to 3.53% from 3.49%, while the average contract interest rate for 15-year fixed-rate mortgages increased to 2.95% from 2.90%.
  • Posting the only decline, the average contract interest rate for 5/1 ARMs decreased to 2.84% from 2.85%.

The data, however, mirrors recent appraisal data. The most recent report from a la mode noted that. According to the latest National Appraisal Volume Index report from a la mode, the housing market is plodding along. 

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