Application Volume Down on Drop in Refi Activity

Mortgage application volume was down 0.7% from the prior week as a drop in refinance activity cancelled out a gain in purchases, according to the Mortgage Bankers Association.

This happened even though mortgage rates fell after the Federal Open Markets Committee elected not to raise short-term interest rates.

Refi application volume decreased 2% from the previous week, and the market share fell to 62.7% from 63.1%. On a seasonally adjusted basis, the purchase index increased 1% while unadjusted it was unchanged from the previous week. Purchase activity on an unadjusted basis was 10% higher than the same week one year ago.

The share of Federal Housing Administration-insured loan applications remained unchanged at 10.2%, while Veterans Affairs-guaranteed apps increased to 11.9 % from 11.6% the week prior. USDA loan program applications were just 0.6% of total volume, down from 0.7% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased four basis points to 3.66% from 3.7%, while for 30-year FRMs jumbo loan balances (greater than $417,000), the rate decreased to 3.64% from 3.69%.

FHA loans had an average contract interest rate of 3.52%, down four basis points from last week.

The average contract interest rate for 15-year FRMs decreased to 2.95% from 2.99% one week ago, while the average contract interest rate for 5/1 ARMs decreased to 2.92% from 2.96%.