Mortgage applications increased 0.5% the week ending August 23 from one week earlier, the Mortgage Bankers Association (MBA) reported Wednesday. The Market Composite Index, a measure of mortgage loan application volume, fell by 1% from the previous week.
Refinances continued to push far past August 2023’s volume, increasing 85% annually after being 90% higher year over year the week prior.
The MBA’s seasonally adjusted Purchase Index increased 1% from a week earlier, decreasing 1% on an unadjusted basis, and was 9% lower year over year.
Mortgage rates have declined for four straight weeks to their lowest level since April 2023, but purchase applications still have not moved much, MBA Deputy Chief Economist and Vice President Joel Kan pointed out in his commentary.
“Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase,” Kan said.
Refinances made up 46.6% of the total share of mortgage activity, an increase from 46.3% the week prior.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.5% of total applications. The FHA share of total applications decreased to 15.3% from 15.6% the week prior. The VA share of total applications increased to 15.9% from 15.3% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.44% from 6.50%, with points decreasing to 0.54 from 0.60 (including the origination fee) for 80-percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 6.75% from 6.68%, with points decreasing to 0.39 from 0.56 (including the origination fee) for 80-percent LTV loans. The effective rate increased from last week.
