Mortgage applications down 1.4% as purchases slide

There was a decrease in mortgage applications last week with loans for home purchase taking the biggest fall.

The Mortgage Bankers Association’s data shows a 1.4% decrease in overall applications on a seasonally adjusted basis and down 1% unadjusted compared to the previous week.

Purchase applications were down 3% both seasonally adjusted and unadjusted and were down 6% from a year earlier. Refinances were up 0.1% week-over-week and were 84% higher than a year earlier.

Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, noted that the purchase index was down for the third consecutive week.

“Despite healthy demand, inadequate supply levels continue to hold back some would-be buyers,” he said. “Rate movements were mixed, with the 30-year fixed rate remaining unchanged (at 4.08 percent), but the FHA rate decreasing to its lowest level since 2017 to 3.94%."

Although refinance applications were essentially flat, Kan said the components of that index diverged.

“Conventional refinances were up 1.1%, but government refinances were down almost 3% - led by a drop in VA applications."

Other stats

• The refinance share of mortgage activity increased to 50.5% of total applications from 49.8% the previous week;
• The adjustable-rate mortgage (ARM) share of activity remained unchanged at 4.7% of total applications;
• The FHA share of total applications remained unchanged at 11.3% from the week prior;
• The VA share of total applications decreased to 12.6% from 13.1% the week prior;
• The USDA share of total applications remained unchanged at 0.6% from the week prior.

Mortgage rates

Average contract interest rates for the week were as follows:

• 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remained unchanged at 4.08%, with points increasing to 0.34 from 0.33 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.
• 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) remained unchanged at 4.04%, with points decreasing to 0.22 from 0.25 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• 30-year fixed-rate mortgages backed by the FHA decreased to 3.94%, the lowest level since September 2017, from 3.98%, with points decreasing to 0.29 from 0.31 (including the origination fee) for 80%LTV loans. The effective rate decreased from last week.
• 15-year fixed-rate mortgages increased to 3.48% from 3.45%, with points decreasing to 0.26 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• 5/1 ARMs decreased to 3.52% from 3.57%, with points increasing to 0.31 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.