Per the Mortgage Bankers Association’s (MBA) survey through the week ending August 4th, total mortgage activity decreased 3.1% from the previous week and the average 30-year fixed-rate mortgage (FRM) rate rose 16 basis points to 7.09%. The FRM rate has fluctuated between 6.9% and 7.1% over the past month.
The Market Composite Index, a measure of mortgage loan application volume, fell by 3.1% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity decreased 2.7%, while refinancing activity decreased 4.0% week-over-week.
Interest rates went up this week as U.S. credit was downgraded. The combination of higher rates and low affordability have made it difficult for potential buyers to purchase. The seasonally adjusted purchase index was 27.0% lower than one year ago while the seasonally adjusted refinancing index was 37.2% lower than one year ago.
The refinance share of mortgage activity fell from 28.9% to 28.7% over the week, while the adjustable-rate mortgage (ARM) share of activity rose to 6.9% from 6.5%. The average loan size for purchases was $416,400 in the first week of August, down from $425,200 over the month of July. The average loan size for refinancing decreased from $257,300 over the month of July to $256,800 in the first week of August. The average loan size for an ARM was up at start of August to $827,500 while the average loan size for a FRM fell to $336,600.