Mortgage application activity fell once again last week, with the rate of decline accelerating.
The Mortgage Bankers Association (MBA) reported a seasonally adjusted 8.5 percent drop in loan application volume for the week ending February 21, bringing application numbers even lower after a 4.1 percent decrease the previous week.
On an unadjusted basis, MBA’s application index fell 7 percent.
Refinance application volume was down 11 percent week-over-week, while the refinance share of all mortgage activity dropped 3 percentage points to 58 percent—its lowest level since September last year.
Meanwhile, MBA’s seasonally adjusted Purchase Index declined 4 percent, falling back to its lowest level since 1995.
While purchase applications were down only 0.1 percent unadjusted, MBA’s chief economist, Mike Fratantoni, says any drop is cause for concern.
“[T]his is the time of year we would expect a significant pickup in purchase activity, and we are not yet seeing it,” Fratantoni said.
The continued trend in purchase application volume may be partially explained by last week’s increase in mortgage rates. According to MBA’s measure, the average 30-year fixed rate was up to 4.53 percent, the highest since the week of January 17, with points increasing to 0.31 for 80 percent loan-to-value ratio loans.