Another week brings a new low for purchase mortgage applications
US mortgage applications fell for the second straight week, with purchase activity declining to its lowest level since June.
The Market Composite Index – the Mortgage Bankers Association’s gauge of application volume – posted a 3% drop during the week ending July 28. Both refinance and purchase application volumes were also down 3% on a seasonally adjusted basis, driven by a six-basis point rise in the contract interest rate for 30-year mortgages.
“Mortgage rates edged higher last week, with the 30-year fixed mortgage rate’s increase to 6.93% and leading to another decline in overall applications,” said Joel Kan, MBA’s deputy chief economist. “The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inventory and rates still close to 7% are crimping affordability for many potential homebuyers.”
Read more: How are mortgage rates set - does the government control them?
According to MBA’s Builder Application Survey, the median mortgage payment for purchase mortgages climbed from $2,515 in May to $2,520 in June.
Read more: MBA: Housing affordability remains strained despite home price slowdown
Of total applications, the refi share of mortgage activity remained flat at 28.9%, while the adjustable-rate mortgage (ARM) share of activity increased to 6.5%.
“The refinance market continues to feel the impact of these higher rates, and applications trailed last year’s pace by over 30% with many homeowners not looking for refinance opportunities,” Kan said.
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