After its first increase in six weeks, mortgage application activity declined despite lower interest rates, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Aug. 24 dropped 1.7%, as the refinance index fell 3% from one week earlier. The refinance share of application activity stayed static at 38.7% from the previous week.
“Applications resumed their downward motion last week, even as mortgage rates decreased to their lowest levels in a month,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement to National Mortgage News. “Treasury yields were lower over the week as well, primarily driven by a release of FOMC minutes showing that Fed officials may be taking a more cautious approach to the final two expected rate hikes of 2018.”
The seasonally adjusted purchase index declined 1% from a week prior. On an unadjusted basis, the purchase index decreased 3% compared with the previous week, while being 3% higher than the same week one year ago.
Adjustable-rate loan activity dropped to 6.3% from 6.5% of total applications, while the share of Federal Housing Administration-guaranteed loans held at 10.2% from the previous week.
The share of applications for Veterans Affairs-guaranteed loans and the U.S. Department of Agriculture/Rural Development share both remained unchanged from last week as well at 10.5% and 0.7%, respectively.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) fell three basis points to 4.78%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate held at 4.68%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA dropped 5 basis points to 4.77%. The average for 15-year fixed-rate mortgages took a slight step down to 4.24% from 4.25%.
The average contract interest rate for 5/1 ARMs fell 5 basis points to 3.95%.