Key Mortgage Index Drops Even as Rates Stay Below 7%
U.S. mortgage applications declined last week even as mortgage rates stayed below 7% for the eighth week in a row--the longest stretch in almost five years, the Mortgage Bankers Assn. of America said Wednesday.
The MBA’s mortgage applications index fell 0.5% to 407.0 in the week ended July 31, from 409.0 the previous week. The refinancing index fell 3.15 to 1278.8 last week, from 1320.2 the previous week, while the purchase index--which gauges demand for new houses--rose 1.9% to 257.2 from the previous week’s 252.4, the MBA said. All the percentages are seasonally adjusted changes from the previous week’s index levels.
Even with the decline, “overall mortgage activity remains strong,” said Scott Brown, an economist at Raymond James & Associates in St. Petersburg, Fla., before today’s report.
Since the second week of January, the overall applications index has held above last year’s high of 348.3, reached during the last week of October. The refinancing index has ranged from 1087.0 to 1470.6 since the first of March, after peaking at 3115.8 during the third week of January. And the purchase index has ranged this year from 217.20 to 313.4.
The MBA also reported that the average contract rate on a 30-year fixed-rate mortgage with a 20% down payment rose 2 basis points to 6.93% last week. That’s eight weeks in a row below 7%--the longest stretch since late 1993, when the contract rate held below 7% for 12 consecutive weeks.
The average rate on a one-year adjustable-rate mortgage, pegged to the one-year constant-maturity Treasury index, fell 10 basis points to 5.88%.
Low mortgage rates have helped keep home sales at or close to record levels. And while a measurement of U.S. housing affordability slipped in the second quarter, it stayed close to its highest level in 25 years, the National Assn. of Realtors reported.
The association’s composite housing affordability index fell to 131.1 in the second quarter from 134.9 during the first three months of this year.
