Mortgage Market It seemed like they were in wait-and-see mode. Last week, the Federal Reserve signaled that a September rate cut is possible, perhaps under consideration. In the meantime, most interest rates have edged lower.
The Mortgage Bankers Association announced that its Market Composite Index, a measure of mortgage application volume, rose 0.5% from the previous week on a seasonally adjusted basis and fell 1.0% on an unadjusted basis.
The refinancing index fell 0.1% That's down from the previous week, but still 85 percent below the same week a year ago. The rate of refinance applications increased to 46.6 percent from 46.3 percent the previous week.
Seasonally adjusted The purchase index rose 1.0%, while the adjusted figure was down 1.0%. Purchase applications were down 9.0 percent compared to the same week a year ago.
“Mortgage rates fell for the fourth consecutive week, with 30-year fixed rates at 6.44%, the lowest since April 2023. Rates are more than 80 basis points lower than a year ago,” said Joel Kang, MBA vice president and deputy chief economist. “Mortgage applications increased slightly due to a slight uptick in purchase activity. Refinance applications were essentially unchanged but are up 85% from last year as borrowers, particularly FHA and VA borrowers, continue to act. As observed in recent weeks, Despite falling interest rates, purchase applications have been slow. As interest rates fall and the inventory of homes for sale begins to increase, potential homebuyers are patiently waiting.”
Other highlights from the MBAās Weekly Mortgage Applications Survey
- Loan size also remained steady: the average size decreased from $372,600 to $372,100, while purchase loans increased $700 to $427,000.
- The FHA's share of total claims decreased from 15.6% to 15.3%, while the VA's share increased from 15.3% to 15.9%. USDA claims were 0.4%, unchanged from the previous week.
- The conforming 30-year fixed rate mortgage (FRM) rate was 6.44%, down 6 basis points from the previous week. The points also decreased from 0.60 to 0.54.
- The interest rate on the 30-year fixed-rate jumbo bond increased to 6.75% from 6.68%, with the points decreasing from 0.56 to 0.39.
- The interest rate on a 30-year fixed-rate mortgage fell 6 basis points to 6.36 percent, with the point value increasing from 0.78 to 0.80.
- The average contract interest rate for the 15-year fixed-rate mortgage fell from 6.04 percent to 5.88 percent, with points falling from 0.71 to 0.68.
- The interest rate on the 5/1 adjustable rate mortgage (ARM) decreased from 6.25% to 5.98%, with points increasing from 0.57 to 0.65.
- ARM's activity share remained unchanged at 5.5%.