Following
The MBA's Market Composite Index, a measure of loan activity based on surveys of the association's members, decreased 2.3% on a seasonally adjusted basis for the week ending August 12, with both purchases and refinances posting drops in volume. Current mortgage activity is now 62% below its mark of a year ago.
The Refinance Index dipped 5% week over week, also falling to its lowest mark since 2000, with a 6% drop in conventional refinances driving the index downward, said Joel Kan, MBA's associate vice president of economic and industry forecasting. With refinance incentive having plunged due to higher interest rates and a shrinking number of applicants who might benefit, volumes are currently down 82% compared to the same week last year.
Meanwhile, the seasonally adjusted Purchase Index also decreased 1% from the previous week and is 62% off the pace of a year ago.
"Home-purchase applications continued to be held down by rapidly drying up demand, as high mortgage rates, challenging affordability and a gloomier outlook of the economy kept buyers on the sidelines," Kan said in a press release.
Recent reports from a number of research groups point to more frequent price cuts and fewer bidding wars across the country, while homebuilders also
The refinance share relative to overall mortgage activity decreased to 31.2% of the total pool of applications, down from 32% the previous week.
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The mean purchase size came in 1.3% lower to land at $410,900 after averaging $416,300 the prior week. The average refinance amount saw a larger decrease of 5.3%, tumbling to $271,600 from $286,000.
Government-agency loans edged down in tandem with the composite index, but their share of overall applications picked up. Mortgages insured by the
Rate movements for 30-year fixed mortgages among MBA lenders came in muted, but averages are still more than 2% higher from where they were a year ago, Kan said.
The average contract fixed rate for 30-year mortgages with conforming balances of $647,200 or less, inched down to 5.45% from 5.47% seven days earlier.
Heading in the opposite direction was the 30-year fixed-contract average for nonconforming balances greater than $647,200, which increased 5 basis points to 5.14% from 5.09% week over week.
The contract average of 30-year FHA-backed loans also climbed 3 basis points to 5.38% from 5.35% the prior week.
But average rates for 15-year and adjustable mortgages made larger swings. The contract average for 15-year fixed-rate mortgages jumped 13 basis points, coming in at 4.87% from 4.74% the previous week.
The 5/1 adjustable-rate contract average fell after climbing one week prior, sliding down 17 basis points to 4.43% from 4.6%.