Increased mortgage rates continued to damp down both purchase and refinance activity during the week ended August 11. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, decreased 0.8 percent on a seasonally adjusted basis from the prior week and declined by 2 percent before seasonal adjustment. The Refinance Index fell 2 percent and was 35 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 28.6 percent of total applications from 28.7 percent week-over-week. [refiappschart] The seasonally adjusted Purchase Index was unchanged from the prior week and slid 2 percent on an unadjusted basis. Purchases were 26 percent lower than during the same week in 2022. [purchaseappschart] “Treasury rates were elevated again last week following mixed data on inflation and more indication of resiliency in the economy, which may pose a challenge to the Federal Reserve’s efforts to lower inflation. The 30-year fixed mortgage rate increased for the third straight week, reaching 7.16 percent, matching October 2022’s rate and the highest rate since 2001 ,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Overall applications decreased because of these higher rates, as both purchase and refinance applications ended the week at their lowest levels since February 2023. Government purchase applications provided a bright spot, increasing 2.4 percent over the week, driven by increases in both FHA and VA purchase categories. The ARM share of applications rose slightly to 7 percent, the highest since April 2023, as borrowers look[ed] for relief from higher fixed rates.”
