Mortgage applications for home purchases and refinances increased for the first time in five weeks but remain at low levels. For the week that ended Aug. 25, mortgage applications picked up 2.3% from the prior week, according to data from the Mortgage Bankers Association.
“Mortgage rates were mostly unchanged last week, with the 30-year fixed rate remaining at 7.31 percent – the highest since December 2000. Treasury yields peaked early in the week and did move lower by the end, which may have spurred some activity,” said Joel Kan, MBA’s vice president and deputy chief economist.
The seasonally adjusted purchase index increased 2% from one week earlier while the unadjusted purchase index was 27% lower than the same week one year ago.
“Purchase applications increased but were still 27 percent lower than a year ago, as elevated mortgage rates and tight housing inventory continue to weigh on home-buying activity,” Kan added.
Refinance index increased 3% from the previous week, but is still 28% lower than the same week one year ago. Also noteworthy, a 7.9% spike in conventional refinances drove up the whole market last week, but the refinance market remains slow, said Kan. Government refinance applications dropped more than 10% last week.
The refinance share of mortgage activity increased to 30.1% of total applications from 29.5% the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity decreased to 7.5% of total applications from 7.6% last week.
The Federal Housing Administration loans’ share decreased to 13.2% from 14.3% the week prior. The U.S. Department of Veteran Affairs loans’ share remained unchanged at 11.6%. Lastly, the U.S. Department of Agriculture loans’ share fell to 0.4% from 0.5% a week prior.
The average contract interest rate for 5/1 ARMs fell to 6.48% from 6.50% a week prior.