Despite a fall in mortgage rates to the lowest level seen since last October, mortgage applications fell slightly this week, according to the latest Mortgage Bankers Association (MBA) data.
MBA’s Weekly Mortgage Applications Survey for the week ending August 15 found that applications fell 1.4% from one week earlier, and declined 2% on an unadjusted basis.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, said that applications were down as a result of mortgage rates remaining high and a large drop in VA applications, which he specified are a “typically volatile segment of the market.”
The seasonally adjusted Purchase Index increased 0.1%. The unadjusted Purchase Index decreased 2% compared with the previous week and was 23% higher than the same week one year ago.
Kan noted that “Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace.”
The Refinance Index decreased 3% from the previous week and was 23% higher than the same week one year ago. The refinance share of mortgage activity decreased to 46.1% of total applications from 46.5% the previous week.
In addition, the adjustable-rate mortgage (ARM) share of activity decreased to 8.6% of total applications. The FHA share of total applications increased to 19.1% from 18.4% the week prior. The VA share of total applications decreased to 13.4% from 14.2% the week prior. The USDA share of total applications increased to 0.6% from 0.5% the week prior.
“Prospective homebuyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges,” concluded Kan.
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