The housing market appears to be in the dog days of summer, as
The purchase application level for the week ending Aug. 16 was the lowest since February, the Mortgage Bankers Association said in its Weekly Applications Survey. The MBA's Market Composite Index, a gauge of application volume, fell 10.1% on a seasonally adjusted basis from a busier stretch the week prior.
Prospective buyers stood pat despite the average contract rate for 30-year fixed rate conforming loans falling to 6.50% from 6.54% the week prior. Points to buy down those purchase rates also ticked up to 0.60 from 0.57 for mortgages with 80% loan-to-value ratios.
The pullback was more pronounced in the MBA's Refinance Index, down 15.2% weekly, than the seasonally adjusted Purchase Index, which fell 5.2% over the same period. The Refinance Index however was up 90% higher than the same time a year ago.
San Diego-based
"It's not surprising," he said. "This is traditionally a vacation season. We're just getting ready to go back to school, and in some areas we already are."
Home sales have also slowed despite rising inventory levels, Joel Kan, MBA vice president and deputy chief economist, said in a press release.
"Even with lower mortgage rates, potential buyers might be more selective now that there are more options."
Refinance applications, which
Federal Housing Administration loans made up 15.6% of all origination activity, an increase from the prior week's 13.5% share. Department of Veterans Affairs-guaranteed mortgages were 15.3% of last week's applications, a decrease from 16.8% the week before. U.S. Department of Agriculture sponsored loans were flat with a 0.4% share ending last week.
Contract rates for most products also fell weekly. Jumbo borrowers secured rates for 30-year fixed loans last week at 6.68% from 6.78% the week prior, using more points with 0.56 compared to 0.37.
FHA borrowers saw average contract rates for 30-year fixed-rate mortgages dip 7 basis points last week to 6.42%; their use of points remained flat at 0.78.
Figures for products wavered. The average contract interest rate for 15-year fixed-rate loans ending Aug. 16 increased to 6.04% from 5.96%, as points for those rates jumped to 0.71 from 0.65. The average contract rate for 5/1 ARMs had a larger weekly increase, from 6.04% to 6.25%, with the use of points sinking to 0.57 from 0.87.
Leinen suggested borrowers are still sidelined by factors such as
"A lot of people are asking for pre-qualifications, meaning they're beginning to shop," said Leinen. "We're definitely talking about rate numbers that we haven't spoken about for quite a while."
