Total mortgage applications submitted in the week ending August 14 rose 5.6% from last week’s submissions. Total applications were up 25% from the same week last year, according to the most recent weekly survey by the Mortgage Bankers Association (MBA). Applications for refinanced mortgages rose 6.9% over last week, when refis were down 7.2% from the week before. The gain in refinance applications pushed the refi share to 53.3% of total applications, from 52.3% a week earlier. The MBA, which also tracks mortgage interest rates in its weekly survey, said average rates fell across the board, with 30-year fixed-rate mortgages slipping 23 bps, 15-year fixed-rate mortgages falling 19 bps and one-year adjustable-rate mortgages decreasing 5 bps. If the lower rates are connected with higher weekly applications, they did not seem to take any significant effect on the number of households participating in the application stage. A separate survey conducted by Mortgage Maxx indicated a 1.9% decline in household activity. The Mortgage Application Index — or MAX — adjusts raw application data to count multiple submissions from a single household as one participant in the application process. Household activity in California alone fell 2.4% in the week ending August 14. Deterioration in prepayments, when mortgages are prepaid out of a securitization through refinance, poses a significant risk of pushing the index to lows near or below lows seen in 2008, MAX publisher Paul Descloux says in the weekly commentary. “This should be cause for concern both in and out of the housing sector as it reflects unrelentingly dismal economics,” he says. “The perennial deceleration in organic housing transactions begins in three short weeks with the onset of Labor Day. Add this entire mix to the notion that housing may not be the best investment, and the demand side of the equation will remain historically challenged.” Write to Diana Golobay.

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