Mortgage applications decreased 3.3% from one week earlier, but purchase activity momentum persisted with home sales remaining a bright spot in the economic recovery, according to the Mortgage Bankers Association.
"Positive economic data reported last week on retail sales, as well as a large U.S. Treasury auction, drove mortgage rates to their highest level in two weeks," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "The rise in rates dampened refinance activity, but purchase applications continued their strong run and were 27% higher than a year ago — the third straight month of year-over-year increases."
The MBA's Weekly Mortgage Applications Survey for the week ending Aug. 14 found that the refinance index decreased 5%
Meanwhile, the seasonally adjusted purchase index increased 1% from one week earlier, while the unadjusted purchase index decreased 1% percent compared with the previous week.
"Conventional purchase applications drove last week's increase, while applications for government loans decreased," Kan said. "The housing market remains a bright spot in the current economic recovery and these results, combined with July data on
Adjustable-rate mortgage activity remained unchanged at 2.7% of total applications, while the share of Federal Housing Administration-insured loan applications decreased to 10.3% from 10.4% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 11.2% from 11.4% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased 7 basis points to 3.13%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate increased 1 basis point to 3.41%.
However, the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 7 basis points to 3.16%. For 15-year fixed-rate mortgages, the average increased 7 basis points to 2.73%. The average contract interest rate for 5/1 ARMs decreased 5 basis points to 2.95%.