Mortgage Applications Decrease Slightly

The amount of people applying for a home loan saw a slight decrease over the holiday week.

The Mortgage Bankers Association’s (MBA) Weekly Applications Survey and Market Composite Index decreased 0.2% the week ending July 5. This included an adjustment for the July Fourth holiday and a seasonal adjustment. On an unadjusted basis, the Index decreased 20% compared with the previous week. 

The Refinance Index decreased 2% from the previous week and was 28% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1% from one week earlier, while the unadjusted Purchase Index decreased 19% compared with the previous week and was 13% lower than the same week one year ago. 

“The recent uptick in mortgage rates has slowed demand. Mortgage applications were essentially flat last week, as mortgage rates remained around seven percent,” MBA’s Vice President and Deputy Chief Economist Joel Kan commented. “Purchase activity picked up slightly, driven primarily by increases in FHA and VA applications. Refinance applications decreased for the fourth consecutive week, in line with higher rates. Although home equity gains have been significant in recent years, most borrowers do not have much of an incentive to refinance at current rates.”  

To Kan’s point, the refinance share of mortgage activity decreased to 34.9% of total applications from 35.7% the previous week. 

The adjustable-rate mortgage (ARM) share of activity increased to 6.2% of total applications. The FHA share of total applications decreased to 12.5% from 13.1% the week prior. The VA share of total applications increased to 13.7% from 12.9% the week prior. The USDA share of total applications increased to 0.4% from 0.3% the week prior.