Mortgage application activity declined in the week ending Aug. 17 as an increase in mortgage rates led to a further decline in refinancing activity.
The Mortgage Bankers Association (MBA) reported that the Refinance Index fell 9.2% or 467 points to 4610, the lowest the index has been since the week of the July 4 holiday.
The decrease was not unexpected. Since peaking at the end of July at 5453 as the 30-year fixed mortgage rate hit a record low, refinancing activity has dropped over 15% as mortgage rates have moved higher, albeit slightly.
Activity has stalled on borrower burnout as mortgage rates had been setting new lows from May through July. In addition, rates have held below 4.0% since the end of March.
In terms of mortgage rates, the contract interest rate for 30-year fixed rate conforming loans averaged 3.86%, a 10 basis points jump from the previous repor. Meanwhile, Federal Housing Administration rates also rose to 3.62% from 3.53%.
In this latest report, the MBA also provided an update on Home Affordable Refinance Program (HARP)activity reporting it unchanged at 24%.
At this time, August looks to be the peak in CPRs on the HARP coupons. However, speeds are expected to remain near their peaks into early 2013.
Finally, after falling for five straight weeks amidst record affordability the Purchase Index increased nearly 1% to roughly 178.