Mortgage applications edged up slightly during the week ending July 27, as the refinance index reached its highest level in three years, an industry trade group said Wednesday. Still, analysts viewed the report as a sign of general malaise in the mortgage lending market.
Overall mortgage applications edged up 0.2% from a week earlier while the refinance index grew 0.8%, reaching its highest level since April 17, 2009, the Mortgage Bankers Association said.
Despite a mild pick up in refinancings, the refinance index felt the sting of a 6% drop in government loan applications.
Home purchases also cooled with the purchase index falling 2% from the previous report.
Meanwhile, the adjustable-rate share of mortgage activity fell to represent 4.1% of all mortgage applications.
Capital Economics responded to the report saying, "The latest mortgage applications data provide further evidence that record low mortgage rates are doing little to boost demand among mortgage-dependent buyers. Meanwhile, the FHFA has reaffirmed its opposition to principal forgiveness on mortgages held by Fannie Mae and Freddie Mac."
The 30-year, fixed-rate mortgage with a conforming loan balance increased slightly to 3.75% from 3.74% a week earlier. In addition, the average interest rate for the 30-year, FRM with a jumbo loan increased to 4.01% from 3.99%.
The average contract interest rate for a 30-year, FRM loan backed by FHA remained unchanged at 3.52%, the lowest FHA rate in the survey's history.
In addition, the 15-year, FRM grew to 3.09% from 3.07%, while the average contract interest rate for the 5/1 ARM increased to 2.73% from 2.68%.