Mortgage application activity went into decline again last week, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the trade group’s measure of mortgage loan application volume, was down by 0.8% on a seasonally adjusted basis from one week earlier and down 12% on an unadjusted basis. The seasonally adjusted Purchase Index recorded a 1% uptick from one week earlier but dropped 11% on an unadjusted basis – the unadjusted Purchase Index was also 27% lower than the same week one year ago.
The Refinance Index tumbled by 5% from the previous week and plummeted 31% from the same week one year ago. The refinance share of mortgage activity decreased to 29.1% of total applications from 30% in the previous week.
Among the federal programs, the FHA share of total applications increased to 14.2% from 13.7% the week prior while the VA share of total applications remained unchanged at 11.3% and the USDA share of total applications dipped to 0.4% from 0.6%.
“Mortgage applications decreased for the seventh time in eight weeks, reaching the lowest level since 1996 – last week’s decline was driven by a 5 percent drop in refinance applications to the weakest reading since January 2023,” said Joel Kan, MBA’s vice president and deputy chief economist. “Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to sell and buy a new home at a higher rate.”
Separately, the MBA released its Mortgage Credit Availability Index (MCAI) data for August. The MCAI rose by 0.3% to 96.6 last month – the index was benchmarked to 100 in March 2012. The Conventional MCAI increased 0.6%t, while the Government MCAI was unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.7% and the Conforming MCAI fell by 2.7%.
“Credit availability in August increased slightly but remained close to the very low levels last seen in January 2013,” said Kan. “The overall increase was driven by an increased number of loan programs that included parameters such as cash-out refinances and mid-range credit scores. The conforming index dropped to its lowest level since 2011, while the jumbo index increased after three monthly declines.”