New data reveals mortgage demand changes as buyers adjust
US mortgage applications declined last week as interest rates ticked upward, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey released Wednesday.
For the week ending August 15, the Market Composite Index, a measure of mortgage loan application volume, fell 1.4% on a seasonally adjusted basis from the prior week. On an unadjusted basis, applications dropped 2%.
Refinance activity continued to soften, with the Refinance Index slipping 3% from the previous week, though it remained 23% higher than the same period a year ago. The seasonally adjusted Purchase Index was nearly flat, edging up 0.1%. On an unadjusted basis, purchases fell 2% week over week but held 23% above last year’s level.
“Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Applications were down as a result, driven by a 16% decrease in VA applications, which are a typically volatile segment of the market.”
Kan added that Federal Housing Administration (FHA) refinance applications rose during the period, supported by the FHA rate at 6.39%, which he described as “competitive relative to other loan types.” He noted that while purchase applications showed little movement, they were at their strongest pace in four weeks.
“Prospective homebuyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges,” Kan said.
The share of refinance activity decreased to 46.1% of total applications from 46.5% the week prior. Adjustable-rate mortgages accounted for 8.6% of applications, down from the previous week.
Government-backed lending shifted, with FHA applications rising to 19.1% from 18.4%, while VA applications dropped to 13.4% from 14.2%. USDA applications edged up to 0.6% from 0.5%.
Rate movements were mixed across loan types. The average contract rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.68% from 6.67%. Jumbo 30-year loans eased to 6.64% from 6.70%. FHA 30-year rates dipped to 6.39% from 6.40%. The 15-year fixed rate increased to 5.96% from 5.93%, while 5/1 adjustable-rate mortgages climbed to 6.01% from 5.80%.
The MBA survey, conducted weekly since 1990, covers US closed-end residential mortgage applications. Participants include mortgage bankers, commercial banks, thrifts, and credit unions.
What are your thoughts the recent data? Share your insights in the comments below.
