Mortgage Apps: Refis Drive Activity As Purchase Volumes Lose Momentum

Bottom Line: Applications rose last week as the average 30-year fixed rate mortgage fell to nearly 4%. The increase was driven by applications for refinancing, while applications for purchases fell slightly. On a trend basis the refi index has been trending higher since the 1st Quarter, accelerating more recently. Purchase activity had been on a slow uptrend, but that trend has now lost momentum after increasing earlier this year . Overall, it appears that refinancing activity will drive marginal mortgage activity in the coming months, while purchase activity suggests that the rebound in housing sales is likely topping out for now. The MBA Mortgage Applications Index ROSE by 5.3% during the week ended August 2 to 509.8, modestly above its 13 week average of 480.0 and 48.8% ABOVE its year ago level. The Purchase Index FELL by 2.0% to 247.9, modestly below its 13 week average of 263.8 but 6.3% ABOVE its year ago level. The Refinance Index ROSE by 11.8% to 2,003. Despite this increase, refinancing activity is sharply above its 13 week average of 1,699 and 115.9% ABOVE its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 7 bps to 4.01% and with the 15-year fixed rate declining by 11 bps to 3.37%.