Home loan applications fell 0.8 percent last week as rates on FHA loans rose, according to the Mortgage Bankers Association (MBA).
Michael Fratantoni, the MBA’s chief economist, said conventional mortgage rates remained near record lows, in the 3 percent range, in the week ending July 24, and refinancing continued to climb slightly.
However, rates on FHA loans rose, leading to a nearly 18 percent drop in FHA refinancing.
“Home buyers stepped back slightly and there was a larger decline in purchase volume for FHA, VA and USDA loans,” Fratantoni said in a statement.
It was a different story just two weeks ago when the MBA reported it mortgage applications rose by a third as June turned into July.
The weekly mortgage application survey found that the refinancing index fell 0.4 percent from the week ending July 17, but was more than double from the same week a year ago.
Meanwhile, the seasonally adjusted purchasing index fell 2 percent from a week earlier. The unadjusted purchasing index fell 1 percent from the previous week and was up 21 percent from the same week a year ago, the MBA reported.
refinancing was the healthiest mortgage sector as homeowners continue to benefit from historically low rates. Refi activity increased to 65.1 percent of total applications, up from 64.8 percent the week before.
Applications for FHA loans fell to 9.6 percent from 10.8 percent the week before. The VA’s share of total applications rose to 11.2 percent from 10.8 percent the week before. USDA’s share of total applications was unchanged from 0.6 percent the week before.
The average interest rate for a 30-year fixed-rate mortgage on a loan balance of $510,400 or less was flat last week at 3.2 percent, while the 30-year, fixed-rate mortgages with jumbo loans were stable at 3.52 percent.
List of apartments, a San Francisco-based platform that connects renters and ads, reported that a record number of renters and homeowners, 32 percent, missed some or all of their rent or mortgage payments in July.
Although rates are historically low, a study by the Pew Research Center found that a third of millennials have been fired due to COVID-19. Another 42 percent said their wages have been cut, researchers reported. As a result, many millennials are not in the housing market.