Mortgage Purchase Applications Decline 4th Week, Refinancing Lowest Since 2000 -

Mortgage Purchase Applications Decline 4th Week, Refinancing Lowest Since 2000

Aug 08, 2018Jeremy ParkinsonFinance, No picture0

Mortgage applications are yet another sign that housing has peaked this cycle.

Purchase applications for home mortgages fell a seasonally adjusted 2 percent in the August 3 week, posting the fourth weekly decline in a row, while applications for refinancing fell 5 percent to their lowest level since December 2000. Unadjusted, purchase applications were 2 percent below the level a year ago.

The refinance share of mortgage activity decreased by 0.5 percentage points to 36.6 percent.

Mortgage rates were steady, with the average interest rate for 30-year fixed rate conforming mortgages ($453,100 or less) remaining unchanged from the prior week at 4.84 percent. Higher interest rates are taking their toll on mortgage activity and the 2 percent year-on-year decline in purchase applications does not bode well for a housing market already showing little life.

The MBA mortgage application index is weekly, thus it’s a bit noisy. Nonetheless, it’s pretty clear what’s happening: Home prices are unaffordable and the Fed is hiking. Refinancing makes no sense.