Mortgage Applications Slip Lower, Loan Rates Flat

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The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decline of 1.7% in the group’s seasonally adjusted composite index for the week ending August 24. The prior week’s gain, the first in five weeks, was reversed.

Mortgage loan rates moved only a fraction of a point, if they moved at all, last week, with the 30-year fixed rate loan ending the week at 4.63%, according to Mortgage News Daily. The yield on 10-year Treasury bonds closed the week at around 2.813%, down by five basis points week over week. The differential between the 10-year yield and the two-year yield (the yield curve) narrowed by about six basis points.

On an unadjusted basis, the MBA’s composite index fell by 3% week over week. The seasonally adjusted purchase index decreased by 1% compared with the week ended August 17. The unadjusted purchase index dropped by 3% for the week and was 3% higher year over year.

The MBA’s refinance index fell by 3% week over week and the percentage of all new applications that were seeking refinancing was unchanged at 38.7%.

Adjustable rate mortgage loans accounted for 6.3% of all applications, down from 6.5% in the prior week.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage slipped from 4.81% to 4.78%. The rate for a jumbo 30-year fixed-rate mortgage remained at 4.68%. The average interest rate for a 15-year fixed-rate mortgage ticked down from 4.25% to 4.24%.

The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 4.00% to 3.95%. Rates on a 30-year FHA-backed fixed-rate loan fell from 4.82% to 4.77%.