Mortgage application volume declined by 1.9% as of Sept. 3, falling to its lowest level since mid-July, according to the Mortgage Bankers Association’s weekly survey published on Wednesday.
On an unadjusted basis, MBA’s index decreased by 3% compared to the previous week.
Pushing the decline was the refinance index, which dipped by 3% from the previous week and was 4% lower than the same week year-over-year, the MBA said.
The seasonally adjusted purchase index also experienced a decline, albeit a marginal one of 0.2% from one week earlier, the report found.
Mike Fratantoni, senior vice president and chief economist at the MBA, noted that while refinance volume seems to be tapering — which has been a trend in recent months — purchase activity is also lower than expected.
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“Economic data has sent mixed signals, with slower job growth but a further drop in the unemployment rate in August,” he said. “We expect that further improvements will lead to a tapering of Fed MBS purchases by the end of the year, which should put some upward pressure on mortgage rates.” Mortgage rates have stayed just above 3% for the past several weeks.
MBA’s survey noted that the refi share of mortgage activity remained unchanged at 66.8% of total applications from the previous week, while the adjustable-rate mortgage (ARM) share declined by 2.5% of total applications.
Concurrently, FHA’s share of total applications dipped to 10.9% from 11.2%, and VA’s share of applications increased to 10.4% from 9.7% the week prior, the MBA said. The share of USDA applications did not budge, remaining at 0.5%.
Meanwhile, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03 %, for 80% loan-to-value ratio (LTV) loans, the trade group said.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loans increased to 3.14% from 3.13%, and 30-year fixed-rate mortgages backed by the FHA dipped to 3.07% from 3.09%, the report concluded.