Mortgage Apps: Purchase Application Trend Remains Key

Bottom Line: With 30-year mortgage rates holding at 4.84% last week, mortgage applications for both purchase and refinancing fell again. Refi applications have been in a long-term downtrend, but purchase applications were holding onto an uptrend coming into the summer selling season. However, higher rates appear to be hampering affordability and slowing purchase activity now. For now the trend in purchase applications is mixed -- but the momentum is now to the downside and bears watching as an indication of further weakening in the housing market. The MBA Mortgage Applications Index FELL by 3.0% during the week ended August 3 to 342.5, modestly below its 13 week average of 364.8 and 18.2% BELOW its year ago level. The Purchase Index FELL by 2.0% to 233.1, modestly below its 13 week average of 247.7 and 1.8% BELOW its year ago level. The Refinance Index FELL by 4.5% to 928. With this decline, refinancing activity is modestly below its 13 week average of 995 and 35.3% BELOW its year ago level. Contract Mortgage Rates were MIXED with the 30-year fixed rate unchanged at 4.84% and with the 15-year fixed rate declining by 3 bps to 4.26%.