Mortgage application activity edged up for the week ending Aug. 28, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased by a mild 0.8% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index dipped by 1%.
The seasonally adjusted Purchase Index increased 2% from one week earlier while the unadjusted index stumbled by 0.3% – the latter was also 0.2% lower than the same week one year ago.
The Refinance Index decreased 1% from the previous week and was 19% lower than the same week one year ago. The refinance share of mortgage activity slipped to 41.8% of total applications from 42.0% in the previous week.
Among the federal programs, the FHA share of total applications decreased to 15.9% from 16.2% the week prior while the VA share of total applications increased to 13.6% from 12.8% the week prior and the USDA share of total applications remained unchanged at 0.5%.
“Mortgage rates reached their highest levels in four weeks as investors’ concerns about inflation and growing deficits push yields higher across the globe,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Refinance volume dropped in response, but purchase volume increased modestly over the week and was slightly below last year’s level. In many local markets, potential buyers have plenty of homes to choose, and this is likely supporting transaction volume. Another trend we’re monitoring is more borrowers choosing ARMs, with the ARM share back to 8% last week, its highest level in five weeks.”
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