MBA - "Purchase market continues to experience a slowdown"

Mortgage application volumes inched upward for the week ending August 5 but remained “relatively flat,” according to the Mortgage Bankers Association.

Data from MBA’s latest weekly survey showed a 0.2% week-over-week uptick in its Market Composite Index, a measure of loan application volume. On an unadjusted basis, however, the index was down 0.3% compared to the previous week.

“Mortgage rates remained volatile last week – after drops in the previous two weeks, mortgage rates ended up rising four basis points,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Mortgage applications were relatively flat, with a decline in purchase activity offset by an increase in refinance applications.”

Last week, the average long-term mortgage rate retreated below 5% for the first time in four months, down to 4.99%, according to Freddie Mac.

MBA’s report also showed that refinance applications rose 4% week over week and were 82% lower than the same period a year ago. The purchase index, on the other hand, dipped 1% from last week and was 19% lower than a year ago.

“The purchase market continues to experience a slowdown, despite the strong job market,” Kan said. “Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubts about the strength of the economy.”

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Kan added that refinance applications grew over 3% but remained more than 80% lower than a year ago in this higher rate environment. The refi share of mortgage activity climbed from 11.9% to 12.1%.