The latest Mortgage Bankers Association’s (MBA) weekly application surveys shows a decline for refinancing and an increase in mortgage purchasing.
The 30-year fixed-rate mortgage rate increased, averaging close to 3.2 percent for the month and was 3.16 percent in the latest week. In the latest week, total mortgage applications, as proxied by the MBA’s Market Composite Index, decreased by 2.8 percent from the prior week, with the decline caused by a drop in refinancing, owing to its outsized share of total activity (which has historically been the case). In contrast, purchasing activity increased by 1.5 percent.
On an unadjusted basis, purchase applications in the latest week was 6 percent lower than what it was one year ago (year-over-year percent change for the same week) and refinancing was 30 percent lower. The latest week marks the 7th consecutive week of both purchasing and refinancing decreasing on a year-to-year basis.
Future changes for mortgage data, particularly rates, will partly be attributable to the Federal Reserve’s announcement in the prior month of its intention to taper its monthly MBS purchasing by $5 billion a month, beginning in November. This activity, along with reducing purchasing of Treasuries, is also formally referred to as “tapering”.
The refinance share of mortgage activity decreased to 62.9 percent of total applications from 63.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.2 percent of total applications.
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