Higher interest rates led to a 1.1% seasonally adjusted decline in mortgage applications compared with the previous week, according to the Mortgage Bankers Association.
But on an unadjusted basis, the MBA's Weekly Mortgage Applications Survey for the week ending July 12 was up 24%. Last week's results included an adjustment for the Fourth of July holiday.
Refinancings remain a strong point for mortgage originators in the current market as the refinance index increased 2%
Fannie Mae
The refinance share of mortgage activity increased to 50% of total applications from 48.7% the previous week.
The seasonally adjusted purchase index decreased 4% from one week earlier, while the unadjusted purchase index increased 21% compared with the previous week and was 7% higher than the same week one year ago.
"Mortgage rates increased across the board, with the 30-year fixed-rate mortgage rising to its highest level in a month to 4.12%, which is still below this year's average of 4.45%," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.
"Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA refinance applications. Historically, government refinance activity lags slightly in response to rate changes. Buyer interest at the start of the second half of the year continues to outpace year ago levels, with activity last week up 7%."
Adjustable-rate mortgage activity decreased to 4.9% from 5.3% of total applications, while the share of Federal Housing Administration-insured loan applications increased to 10.6% from 10.1% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 12.9% from 13.2% and the U.S. Department of Agriculture/Rural Development share decreased to 0.6% from 0.7% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 8 basis points to 4.12%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 4 basis points to 4.07%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 4 basis points to 4.01%. For 15-year fixed-rate mortgages, the average increased 6 basis points to 3.48%. The average contract interest rate for 5/1 ARMs increased 2 basis points to 3.58%.
