There was less activity on the mortgage application front, according to data from the Mortgage Bankers Association (MBA) for the week ending July 19.
The Market Composite Index dropped by 1.9 percent on a seasonally adjusted basis from one week earlier while the unadjusted index took a two percent dip. The seasonally adjusted Purchase Index decreased two percent from one week earlier and the unadjusted index inched down one percent, although the latter was six percent higher than the same week one year ago. The Refinance Index was two percent lower than the previous week and was 81 percent higher than the same week one year ago, and the refinance share of mortgage activity decreased to 49.8 percent of total applications from 50 percent the previous week.
Among the federal programs, the FHA share of total applications increased to 11.3 percent from 10.6 percent the week prior and the VA share of total applications increased to 13.1 percent from 12.9 percent, while the USDA share of total applications remained unchanged from 0.6 percent.
“Mortgage applications were down last week, even as rates moved lower across the board, with the 30-year fixed rate at 4.08 percent,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Refinance activity was lower, but we did see government refinance applications increase, driven solely by a 12 percent rise in FHA applications. Mortgage rates right now are comparable to the average rate of 4.10 percent for June, but refinances last week were seven percent lower than last month. This is an indication that as we see rates lower for longer, borrowers need more of a drop in rates to consider refinancing. Purchase applications decreased for the second straight week and have been somewhat volatile lately, but were still six percent higher than a year ago.”