Mortgage application activity was on the rise for the week ending Aug. 2, according to new data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased 6.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was up by 6%.
The seasonally adjusted Purchase Index increased 1% from one week earlier while the unadjusted index inched up by 0.3% — the latter was also 11% lower than the same week one year ago.
The Refinance Index increased 16% from the previous week and was 59% higher than the same week one year ago. The refinance share of mortgage activity increased to 41.7% of total applications from 38.2% the previous week.
The adjustable-rate mortgage share of activity increased to 6.3% of total applications.
Among the federal programs, the FHA share of total applications decreased to 13.4% from 14.2% the week prior while the VA share of total applications increased to 14.3% from 13.5% and the USDA share of total applications dipped to 0.4% from 0.5%.
Joel Kan, MBA’s vice president and deputy chief economist, noted that as a result of declining mortgage rates, refinance applications “increased across all loan types, particularly for VA loans, and were almost 60% higher than it was at this time last year and were at its highest level in two years. Despite the downward movement in rates, purchase activity only saw small gains, with an increase in conventional purchase applications offset by decreases in government purchase applications. For-sale inventory is beginning to increase gradually in some parts of the country and homebuyers might be biding their time to enter the market given the prospect of lower rates.”
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