Mortgage Application Activity Slows Again

Mortgage application activity slowed during the past week, according to new data from the Mortgage Bankers Association (MBA).

The Market Composite Index, the trade group’s measurement for mortgage loan application volume, dropped by 3% on both a seasonally adjusted and an unadjusted basis from one week earlier. The Purchase Index was also down by 3% on both a seasonally adjusted and unadjusted basis – the unadjusted index was also 26% lower than the same week one year ago.

The Refinance Index also dipped by 3% from the previous week and was 32% lower than the same week one year ago. The refinance share of mortgage activity inched up to 28.9% of total applications from 28.7% one week earlier.

Among the federal programs the FHA share of total applications increased to 13.3% from 12.7% in the week prior while the VA share of total applications decreased to 11.6% from 12.1% and the USDA share of total applications increased to 0.7% from 0.5%.

Joel Kan, MBA’s vice president, and deputy chief economist, observed that the purchase index fell to its lowest level since the beginning of June, which he attributed to “weaker conventional purchase application volume, as limited housing inventory and rates still close to 7% are crimping affordability for many potential homebuyers. The refinance market continues to feel the impact of these higher rates, and applications trailed last year’s pace by over 30% with many homeowners not looking for refinance opportunities.”