Rates Continue to Deter Purchasing    

Mortgage application volume during the week ended July 24 was down slightly from the prior week. Static interest rates did little to stir the refinancing pot, but purchase volume declined. The Mortgage Bankers Association said its Market Composite Index, a measure of that volume, decreased 1.8 percent on a seasonally adjusted basis from one week earlier and was down 1.5 percent on an unadjusted basis. The Refinance Index ticked down 0.4 percent week-over-week and was 30 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 28.7 percent of total applications from 28.4 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index fell 3 percent and declined 2 percent before adjustment. The index was 23 percent lower than the same week one year ago.   [purchaseappschart] “Mortgage rates were essentially flat last week but remained high, with the 30-year fixed staying at 6.87 percent and contributing to a pullback in mortgage applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The 2.5 percent decline in purchase activity, partly driven by a 10 percent decrease in FHA applications, pushed the purchase index to its lowest level in over a month. The decrease in FHA purchase applications contributed to an increase in the overall average purchase loan size to $432,700, its highest level since the end of this May. Refinance applications remained lackluster, running 30 percent behind year-ago levels. Many borrowers remain on the sidelines given current rates and persistent affordability challenges.”
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