Mortgage applications continue to fall, dropping 0.1% from the previous week, according to the latest data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 31, 2018.
On an unadjusted basis, the Market Composite Index, a measure of loan application volume, slid 0.1% from the previous week. The Refinance Index fell 1% from last week, and the unadjusted Purchase Index also dropped 2% from last week but remains 2% higher than the same week in 2017.
The seasonally adjusted Purchase Index increased 1% once again from the week prior.
The refinance share of mortgage activity increased from last week’s 38.7% of applications to 38.9%, and the adjustable-rate mortgage share of activity inched down to 6.1% from 6.3% last week.
The Federal Housing Administration share of mortgage apps remained unchanged from the previous week, staying at 10.2% and the Veterans Affairs’ share of applications decreased to 10%, falling half a percent from 10.5% from the previous week.
The Department of Agriculture share of apps increased slightly, climbing to 0.8% from 0.7% the week before.
The MBA reported mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased from last week’s 4.78% to 4.8% this week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) fell from 4.68% to 4.67% from the prior week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose slightly from 4.77% last week to 4.79% this week.
The average contract interest rate for 15-year fixed-rate mortgages decreased from 4.24% last week to 4.23% this week.
The average contract interest rate for 5/1 ARMs increased to 4.09% this week, climbing from 3.95% last week.
Notably, the National Association of Realtors revealed that in July, pending home sales fell on an annual basis for seven consecutive months, indicating that prospective borrowers and homeowners aren't in a rush to buy a home.
“The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it,” NAR Chief Economist Lawrence Yun said.
