Mortgage Apps: Apps Drop for First Time in 4 Weeks

Bottom Line:  Mortgage applications fell for the first time in four weeks and remain firmly in a downtrend as mortgage rates remain historically high, despite the recent pullback. Current coupon yields in the secondary market were down over 65bps from mid-June, but rates in the primary market (those available to even the best credit borrowers) were only down about half that. The average 30-year fixed-rate adjusted for points paid fell from 6.20% in the week ended June 17th to 5.92%. Overall, the trend in mortgage applications suggests that the slowdown in housing has continued since the last reported home sales figures. Moreover, there appears to be a risk that purchase application volume will fall below the levels seen from 2017-19 following changes in the tax code that limited mortgage interest deduction.

The MBA Mortgage Application Index FELL -5.4% to 305.0, BELOW the 13-week average of 331.0 and -51.3% BELOW the year-ago level. Non-seasonally adjusted the index ROSE 6.2%.
 
The Purchase Index FELL -4.3% to 233.0, BELOW the 13-week average of 237.0 and -7.8% BELOW the year-ago level.
 
The Refinancing Index FELL -7.7% to 670.0, BELOW the 13-week average of 834.0 and -76.0% BELOW the year-ago level.
 
The effective (adjusted for points paid) 30-year mortgage rate FELL -10bps to 5.92%, ABOVE the 13-week average of 5.69% and 82bps ABOVE the year-ago level.
 
Current coupon yields in the secondary market were down -26.0 bps last week, closing at 4.25%, and were down -7.0 bps this week through Tuesday.