Mortgage refinance applications across the country continued to decrease in August, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
The MBA’s Refinance Index, part of its Weekly Mortgage Applications Survey, showed that refinance activity for the week ending Aug. 28 decreased 3 percent from the previous week and was 40 percent higher than the same week one year ago. Refinance activity began decreasing in late July.
The refinance share of mortgage activity was 62.5 percent of total applications compared to 62.6 percent the previous week. The report marks the third straight week of decreases and coincides with debate over a half-percent fee on refinance mortgages proposed – then quickly postponed – by Fannie Mae and Freddie Mac.
“Both conventional and government refinancing activity decreased last week, despite 30-year fixed and 15-year fixed mortgage rates declining to near historical lows,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Mortgage rates have remained below 3.5 percent for five months now, and it’s possible that refinance demand may be slowing and will not significantly increase again without another notable drop in rates.”
The seasonally adjusted Purchase Index decreased 0.2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 28 percent higher than the same week one year ago.
“Purchase applications were essentially unchanged over the week and were 28 percent higher than a year ago – the 15th straight week of year-over-year increases,” Kan said. “Lenders are reporting that the strong demand for homebuying is coming from delayed activity from the spring, as well as households seeking more space in less densely populated areas.”
Overall, the Market Composite Index, a measure of mortgage loan application volume, decreased 2.0 percent on a seasonally adjusted basis from one week earlier.
The adjustable-rate mortgage share of activity remained unchanged at 2.6 percent of total applications. The FHA share of total applications decreased to 10.2 percent from 10.5 percent the week prior. The VA share of total applications decreased to 11.4 percent from 11.8 percent the week prior.
