Mortgage applications fell 2% last week, according to a report from the Mortgage Bankers Association, marking the third week of declines.
The refinance index also fell 3% last week, however remained 40% higher than the same week one year ago. Despite 30-year fixed and 15-year fixed mortgage rates declining to near historical lows, both conventional and government refinancing activity fell last week, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Mortgage rates have remained below 3.5% for five months now, and it’s possible that refinance demand may be slowing and will not significantly increase again without another notable drop in rates,” Kan said.
Purchase applications remained essentially unchanged, falling .2% from one week earlier on a seasonally adjusted basis, and 28% higher than the same week one year ago – the 15th straight week of year-over-year gains.
According to Kan, lenders are reporting that the strong demand for home buying is coming from delayed activity from the spring, as well as households seeking more space in less densely populated areas.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.6% of total applications.
Here is a more detailed breakdown of this week’s mortgage application data:
- The FHA’s share of mortgage apps fell to 10.2% from 10.5%.
- The VA share of applications fell to 11.4% from 11.8%.
- The USDA share of total applications remained unchanged from 0.6% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell to 3.08% from 3.11%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) remained unchanged from 3.41% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.19% from 3.16%.
- The average contract interest rate for 15-year fixed-rate mortgages fell to 2.67% from 2.7%.
- The average contract interest rate for 5/1 ARMs fell to 3.08% from 3.14%.