Mortgage Applications Little Change, Small Increase

Mortgage applications increased 0.5% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending August 16, 2024. This is a slight reverse from last week’s 10.1% drop, as experts feel homeowners remain on the fence waiting for more mortgage rate changes.

This week’s data:

• The Market Composite Index, a measure of mortgage loan application volume, increased 0.5% on a seasonally adjusted basis from one week earlier. 
• On an unadjusted basis, the Index decreased 1% compared with the previous week. 
• The Refinance Index decreased 0.1% from the previous week and was 85% higher than the same week one year ago. 
• The seasonally adjusted Purchase Index increased 1% from one week earlier. 
• The unadjusted Purchase Index decreased 1% compared with the previous week and was 9% lower than the same week one year ago.
• The refinance share of mortgage activity increased to 46.6% of total applications from 46.3% the previous week. 
• The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.5% of total applications.
• The FHA share of total applications decreased to 15.3% from 15.6% the week prior. 
• The VA share of total applications increased to 15.9% from 15.3% the week prior. 
• The USDA share of total applications remained unchanged at 0.4% from the week prior.
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.44% from 6.50%, with points decreasing to 0.54 from 0.60 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 6.75% from 6.68%, with points decreasing to 0.39 from 0.56 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.36% from 6.42%, with points increasing to 0.80 from 0.78 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.88% from 6.04%, with points decreasing to 0.68 from 0.71 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs decreased to 5.98% from 6.25%, with points increasing to 0.65 from 0.57 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

MBA’s take:

“Mortgage rates declined for the fourth consecutive week, with the 30-year fixed rate at 6.44%, the lowest since April 2023. Rates have now come down more than 80 basis points from a year ago,” said Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage applications were slightly higher, driven by marginally stronger purchase activity. Refinance applications were essentially unchanged but are still 85% higher than last year as borrowers continue to act – particularly FHA and VA borrowers. As observed in recent weeks, despite lower rates, purchase applications have not moved much. Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase.”