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Mortgage Apps, Refis Take a Downturn

Mortgage applications for the week ending August 3 dropped 3 percent from the week prior, to its lowest level since January 2016, according to data released Wednesday by the MBA's weekly survey of mortgage applications.

Along with the downturn in applications, refi applications dipped 5 percent from the previous week, bringing the refinance index to its lowest level since December 2000. Refinance activity ended last week at 36.6 percent of total applications, down from 37.1 percent the previous week. The adjustable-rate mortgage share of activity decreased to 6.3 percent of total applications.

On top of that, the seasonally adjusted purchase index was down 2 percent from one week earlier and was, unadjusted, 2 percent lower than the same week one year ago. The VA share of total applications was up slightly, from 10.5 to 10.6 percent from the week prior.

One sector that did remain steady was FHA applications, which, according to the survey, remained unchanged at 10.4 percent from the week prior. Another was the USDA share, which remained at 0.8 percent from the week prior.

Also unchanged was the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $453,100 or less. Those remained at 4.84 percent, with points remaining unchanged at 0.45 (including the origination fee) for 80 percent loan-to-value ratio loans, according to the report. The left the effective rate unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loans, on the other hand, decreased slightly, from 4.76 to 4.74 percent, with points increasing to 0.39 from 0.37 (including the origination fee) for 80 percent LTV loans, the survey reported. The effective rate for jumbos also remained unchanged from the week prior.

While the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.83 percent from 4.78 percent, the rate for 15-year fixed-rate mortgages dropped slightly from 4.29 to 4.26 percent.

The average contract interest rate for 5/1 ARMs decreased from 4.17 to 4.07 percent, with points increasing to 0.42 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week, the survey reported.

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.
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