On Wednesday, weekly applications for U.S. mortgages to purchase homes dropped to a six-month low even as interest rates on fixed-rate home loans declined, according to data from an industry group. The Mortgage Bankers Association reported its seasonally adjusted index of mortgage activity for home purchases, a leading indicator of housing sales, dropped 4 percent in the week ended Aug. 12. It remained 10 percent higher than the comparable week a year earlier. The median rate on “conforming” 30-year home mortgages, or loans with balances of $417,000 or less, dropped to 3.64% last week from 3.65%, the group based in Washington stated.
Next, the average 30-year rate hit 3.60% in the week ended July 8, which was the lowest since May 2013, and near record lows of 3.47% reported almost 4 years ago, according to data from MBA. Weekly mortgage activity on home purchases reached an eight-month high in early June before a drop since even as 30-year mortgage rates hovered near their lowest in over three years.
On Tuesday, the Commerce Department stated housing starts increased 2.1 percent to an annualized rate of 1.211 million units in July, which was a five-month high. Applications for loans to refinance also dropped last week. MBA’s seasonally adjusted index on mortgage activity for refinancing fell 4 percent from the prior week. In early July, it hit its highest level since June 2013.
The share of weekly refinancing requests was 62.6 percent of total applications, compared with 62.4 percent the previous week, the Washington-based group said. The group added its seasonally adjusted index of total mortgage activity also fell by 4 percent in the latest week. It reached a three-year high a month earlier.