Refinance demand is stalling after a two-week growth spurt last month.
Overall, applications were up to close August, according to the Mortgage Bankers Association. Its Market Composite Index measure of activity was up 1.6% on a seasonally adjusted basis for the week ending Aug. 30,
A Purchase Index up 3% week-over-week helped the measurement notch its fourth rise in five weeks. But the Refinance Index was down 0.3% from Aug. 23 to Aug. 30. Refinances are on a three-week slide after shooting up 34.5% on a weekly basis
The shifts came as the average contract interest rate fell weekly for all but 15-year fixed-rate mortgages. The 30-year fixed rate for conforming loan balances was 6.43% last week, compared to 6.44% the week prior per the MBA's data.
"The refinance share of applications made up almost 46% in August, the highest monthly average since March 2022," Joel Kan, MBA vice president and deputy chief economist, said in a press release.
Tustin, California-based
"Overall, as far as the industry is concerned, we see a slight reduction in purchase activity which we believe is due to borrowers waiting for the FOMC to reduce rates before purchasing a home," said Obradovich in an emailed statement.
Economists are anticipating that the Federal Reserve wil make a
Overall, both the refinance and adjustable-rate mortgage share of activity ending Aug. 30 were flat week-over-week, at 46.4% and 5.5%, respectively.
Applications for Department of Veterans Affairs-backed loans drove demand for government mortgages, with the VA share of activity rising from 15.9% to 16.7% week-over-week. The FHA share moved backwards, accounting for 14.6% of applications last week compared to 15.3% a week earlier.
The average contract interest rate for 15-year fixed interest rates increased to 5.98% last week from 5.88% over the prior period. Also unchanged weekly at 5.98% were average rates for 5/1 ARMs.
Average contract interest rates for 30-year fixed jumbo loans fell to 6.73% from 6.75%, with points decreasing to 0.35 from 0.56 two weeks ago. Thirty-year fixed-rate FHA rates also dropped to 6.30% last week, from 6.36% ending Aug. 23.