Mortgage application activity slipped 1.8% with both refinancing and purchasing activity lower in the week ending Aug. 3.
The Mortgage Bankers Association (MBA) reported the Refinance Index fell 2% to ~5344. Contributing in part to the modest easing was a slight increase in mortgage rates. However, it was very minor. The contract interest rate for 30-year fixed rate conforming loans averaged 3.76% from 3.75%, while Federal Housing Administration (FHA) rates rose two basis points to 3.54%.
Burnout was a more likely factor as refinancing activity jumped has 25% in the previous three weeks to its highest level since April 2009. Borrowers responded to new historical lows in mortgage rates, and in the case of FHA loans, to a decline in mortgage insurance premiums for pre-June 2009 borrowers that became effective June 11.
Meanwhile, despite record affordability the Purchase Index declined 1% to ~180 and has fallen over 6% in the past four weeks. Possibility contributing to this is a decline in housing inventory.
In a recent housing report from the National Association of Realtors, Chief Economist Lawrence Yun said, "We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors."