The demand for mortgages slid last week despite loan rates also sliding as the coronavirus pandemic continued to jolt the real-estate market,
Mortgage applications decreased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 31.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.1 percent on a seasonally adjusted basis from one week earlier.
On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 84 percent higher than the same week one year ago.
The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 22 percent higher than the same week one year ago.
"Mortgage rates dropped to another record low last week, falling below the previous record set three weeks ago to 3.14 percent. Refinance activity decreased - despite the decline in rates - but the current pace remains more than 80 percent higher than a year ago when rates were over 4 percent. MBA's forecast calls for rates to remain at these low levels, which will continue to spur strong refinance activity and offer homeowners relief in the form of lower monthly mortgage payments during these uncertain economic times," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
"Purchase applications also fell slightly, but were still 20 percent higher than a year ago and have now risen year-over-year for 11 straight weeks. Purchase loan balances continued to climb, which is perhaps a sign that the still-weak job market and tighter credit for government loans are constraining some firsttime homebuyers."
The refinance share of mortgage activity decreased to 63.9 percent of total applications from 65.1 percent the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.14 percent from 3.20 percent.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.73 percent from 2.76 percent.
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