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Mortgage applications decreased 3.7% from one week earlier, because of consumer concerns over the direction of the economy outweighed lower interest rates, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Feb. 8 found the seasonally adjusted purchase index decreased 6% from the previous week, while the unadjusted purchase index decreased 6% compared with the previous week and was 5% lower than the same week one year ago.
“Application activity fell last week — even with rates decreasing — as renewed uncertainty about the domestic and global economy likely held potential homebuyers off the market,” Joel Kan, the MBA’s associate vice president of industry surveys and forecasts, said in a press release. “Despite the recent decline in applications, we still expect that the continued strength of the job market and lower rates will support more purchase activity in the coming months.”
The refinance index declined by 0.1% from the previous week while the market share of refinancing applications increased to 43.2% of the total volume, up from 41.6% the previous week.
“The 30-year fixed-rate mortgage dropped to its lowest level since last March, and was 52 basis points lower than its recent high last November. Government refinances provided a bright spark, picking up over 10%, as both FHA and VA refinancing activity saw increases over the week,” Kan said.
Adjustable-rate loan activity decreased to 7.5% from 7.8% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 11% from 10.5% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 11% from 10% and the U.S. Department of Agriculture/Rural Development share increased to 0.6% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased 4 basis points to 4.65%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate decreased 2 basis points to 4.48%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 9 basis points to 4.61%. For 15-year fixed-rate mortgages, the average decreased 7 basis points to 4.04%. The average contract interest rate for 5/1 ARMs decreased 7 basis points to 3.97%.