Mortgage refinance and purchase applications across the country dropped last week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey, even as rates continued to drop.
The MBA’s Market Composite Index, a measure of mortgage loan application volume, showed that mortgage activity for the week ending Sept. 25 decreased 4.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week.
The Refinance Index decreased 7 percent from the previous week and was 52 percent higher than the same week a year ago. The refinance share of mortgage activity decreased to 63.3 percent of total applications from 64.3 percent the previous week.
“Mortgage rates decreased last week, with the 30-year fixed rate mortgage declining 5 basis points to 3.05 percent – the lowest in MBA’s survey. Despite the decline in rates, refinances fell over 6 percent, driven by a 9 percent drop in conventional refinance applications,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans, and that could explain last week’s decline in refinances. Many lenders are still operating at full capacity and working through operational challenges, ultimately limiting the number of applications they are able to accept.”
The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 22 percent higher than the same week one year ago.
“Purchase applications also decreased last week, but activity was still at a strong year-over-year growth rate of 22 percent,” Kan said. “Even as pent-up demand from earlier in the year wanes, there continues to be action in the higher price tiers, with the average loan balance remaining close to an all-time survey high.”
The FHA share of total applications increased to 11.4 percent from 10.1 percent the week prior. The VA share of total applications decreased to 11.9 percent from 12.0 percent the week prior.
