Mortgage application activity dipped in the latest Mortgage Bankers Association (MBA) data tracking the week ending July 5.
The Market Composite Index, the MBA’s measure of mortgage loan application volume, slipped by a scant 0.2% percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index dropped by a not-scant 20% compared with the previous week.
The seasonally adjusted Purchase Index increased 1% from one week earlier, but the unadjusted index fell by 19% compared with the previous week – the latter was 13% lower than the same week one year ago.
The Refinance Index was down by 2% from the previous week, although it was also 28% higher than the same week one year ago. The refinance share of mortgage activity decreased to 34.9% of total applications from 35.7% the previous week.
Among the federal programs, the FHA share of total applications decreased to 12.5% from 13.1% the week prior while the VA share of total applications increased to 13.7% from 12.9% and the USDA share of total applications increased to 0.4% from 0.3%.
“The recent uptick in mortgage rates has slowed demand. Mortgage applications were essentially flat last week, as mortgage rates remained around 7 percent,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase activity picked up slightly, driven primarily by increases in FHA and VA applications. Refinance applications decreased for the fourth consecutive week, in line with higher rates. Although home equity gains have been significant in recent years, most borrowers do not have much of an incentive to refinance at current rates.”
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