Mortgage application volume declined for the second week in a row, as a small rise in rates put a damper on refinance activity, the Mortgage Bankers Association said.
The Market Composite Index decreased by 1.4% on a seasonally adjusted basis for the period ended Aug. 15. The refinance component was down by 3%, although versus the same week in 2024, it was 23% higher.
Purchase volume on a seasonally adjusted basis was 2% higher
The conforming 30-year fixed-rate mortgage averaged 6.69% for the period, a 1 basis point gain over the prior week.
How rates affected this week's mortgage volume
"While this was not a significant increase, it was enough to cause a pullback in refinance applications," said Joel Kan, the MBA's vice president and deputy chief economist. "Purchase applications had their strongest week in over a month, and the average loan size increased to its highest level in two months at $433,400."
The refi share fell to 45.3% from 46.1% for the previous week. Adjustable-rate mortgages also had a drop in share, to 8.4% from 8.6%. The MBA
"Prospective buyers appear to be less sensitive to rates at these levels and are more active, bolstered by more inventory and cooling home-price growth in many parts of the country," Kan said.
Sellers exiting the housing market could impact supply
But Redfin is reporting the market lost 14,000 sellers between May and July, the first drop off in two-years.
Still the market has approximately 519,000 more sellers than buyers. Redfin estimated July's market had 1.43 million buyers and 1.95 million sellers. On the buyer side, this is the lowest on record aside from the start of the pandemic.
Redfin economists have a different view than the MBA when it comes to how the current interest rate environment is affecting borrowers, especially when it comes to affordability.
"Homebuyers are spooked by high home prices, high mortgage rates and economic uncertainty, and now sellers are spooked because buyers are spooked," said Redfin Senior Economist Asad Khan, in a press release. "Some sellers are delisting their homes or choosing not to list at all after seeing other houses sit on the market for weeks or months, only to fetch less than the asking price."
Still, it is
Market shares and rates for other types of mortgages
The Federal Housing Administration-insured application share remained unchanged at 19.1%, even as rates for these loans fell by 4 basis points week-to-week, to 6.35% from 6.39%.
Veterans Affairs activity dropped to 13.3% from 13.4%. U.S. Department of Agriculture mortgage applications declined to 0.5% from 0.6%.
Jumbo mortgage rates were 3 basis points higher, rising to 6.67% from 6.64%. The 15-year FRM had the largest increase among the rates being tracked by MBA, to 6.03% from 5.96%.
The contract rate for the 5/1 ARM averaged 5.94% for the week, down from 6.01% seven days prior.
