Mortgage rates rose for the first time since the middle of July, but that, along with continued consumer worries about the economy, helped to reduce application activity from the prior week.
As a result, mortgage applications decreased 6.2% from one week earlier, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Aug. 23 found that the refinance index decreased 8%
"U.S. Treasury yields were volatile over the course of the week, as the ongoing trade dispute between the U.S. and China continued to generate uncertainty among investors. Rates increased for the first time since the week of July 12, but were still 80 basis points lower than the beginning of the year," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.
The lower rate environment throughout the summer didn’t bring a large number of potential homebuyers into the market.
The seasonally adjusted purchase index decreased 4% from one week earlier, while the unadjusted purchase index decreased 6% compared with the previous week and was 2% higher than the same week one year ago.
"Purchase applications were still up around 2% year-over-year last week, but the drop in rates this summer have not yet led to a significant boost in activity," Kan said. "Uncertainty over the near-term economic outlook and low supply continue to be the predominant headwinds for prospective homebuyers."
Adjustable-rate mortgage activity decreased to 6.1% from 6.4% of total applications and the share of Federal Housing Administration-insured loan applications increased to 10.5% from 9.7% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 9.9% from 11.6% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 4 basis points to 3.94%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 1 basis point to 3.89%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 3 basis points to 3.8%. For 15-year fixed-rate mortgages, the average increased 1 basis point to 3.31%. The average contract interest rate for 5/1 ARMs increased to 3.42% from 3.35%.
