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The Mortgage Bankers Association's latest Weekly Mortgage Application Survey revealed a 0.8% decrease in mortgage applications on an adjusted basis from one week ago. On an unadjusted basis, mortgage applications dipped 1%.
The refinance index decreased by 0.4%, according to the MBA's report. It remains 121% higher than the same week a year ago. The seasonally adjusted purchase index decreased by 2% from a week earlier.
"Mortgage rates remained near record lows for conventional loans last week, and refinances in the conventional sector continued to slightly increase. However, rates on FHA loans rose, leading to an almost 18% drop in FHA refinances," said Mike Fratantoni, MBA’s senior vice president and chief economist. “Homebuyers stepped back slightly, and there was a larger drop in purchase application volume for FHA, VA, and USDA loans. This trend, along with the fact that average loan sizes are increasing, indicates that prospective first-time buyers are being impacted more by the rising economic stress caused by the resurgence in COVID-19 cases, as well as the uncertainty on how the next round of government support will take shape.”
Additionally, the refinance share of mortgage activity increased from 64.8% to 65.1% and the adjustable-rate mortgage share of activity increased to 3.2% of total applications. Meanwhile, the FHA share of total applications decreased from 10.8% to 9.6%, the VA share increased to 11.2% and the USDA share stayed stagnant at 0.6%.
Click here to view the full MBA Weekly Mortgage Application Survey.