Mortgage Apps: Small Rebound From Depressed Levels

Bottom Line:  Mortgage applications rose only slightly to start August, with applications for refinancing edging up but purchase applications dropping again. After secondary market yields dropped in mid-July, it took several weeks for mortgage bankers to comfortably pass along lower rates to primary borrowers. But eventually, borrowers saw lower rates, now consistently back below 6% for the average 30-year fixed-rate mortgage. That has prompted a slight uptick in applications for refis. But the overall level of volume remains very low, with almost no rate impulse seen in purchase applications. Overall, the trend in mortgage applications suggests that the slowdown in housing has continued into August. It appears that purchase application volume will fall towards levels seen in 2015.

The MBA Mortgage Application Index was nearly unchanged, UP 0.2% to 280.0, BELOW the 13-week average of 300.0 and -62.9% BELOW the year-ago level. Non-seasonally adjusted the index was nearly unchanged, DOWN -0.3%.
 
The Purchase Index FELL slightly , DOWN -1.4% to 205.0, BELOW the 13-week average of 221.0 and -18.5% BELOW the year-ago level.The Refinancing Index ROSE 3.5% to 663.0, BELOW the 13-week average of 708.0 and -82.0% BELOW the year-ago level.
 
The effective (adjusted for points paid) 30-year mortgage rate ROSE 9bps to 5.71%, BELOW the 13-week average of 5.81% but 85bps ABOVE the year-ago level.Current coupon yields in the secondary market were up 32.0 bps last week, closing at 4.14%, and were down -8.0 bps this week through Tuesday.