Mortgage applications saw a second straight week of decreases, down 3.0% from the previous week’s dip of 1.8%, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending July 28, 2023.

The week’s numbers: 

• The Market Composite Index, a measure of mortgage loan application volume, decreased 3.0% on a seasonally adjusted basis from one week earlier. 

• On an unadjusted basis, the Index decreased 3% compared with the previous week. 

• The Refinance Index decreased 3% from the previous week and was 32% lower than the same week one year ago. 

• The seasonally adjusted Purchase Index decreased 3% from one week earlier.

• The unadjusted Purchase Index decreased 3% compared with the previous week and was 26% lower than the same week one year ago.

• The refinance share of mortgage activity increased to 28.9% of total applications from 28.7% the previous week. 

• The adjustable-rate mortgage (ARM) share of activity increased to 6.5% of total applications.

• The FHA share of total applications increased to 13.3% from 12.7% the week prior. 

• The VA share of total applications decreased to 11.6% from 12.1% the week prior. 

• The USDA share of total applications increased to 0.7% from 0.5% the week prior.

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.93% from 6.87%, with points increasing to 0.68 from 0.65 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from the previous week.

• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 6.89% from 6.90%, with points decreasing to 0.58 from 0.64 (including the origination fee) for 80% LTV loans. The effective rate decreased from the previous week.

• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.85% from 6.80%, with points increasing to 1.05 from 1.03 (including the origination fee) for 80% LTV loans.  The effective rate increased from the previous week.

• The average contract interest rate for 15-year fixed-rate mortgages increased to 6.39% from 6.37%, with points increasing to 0.78 from 0.75 (including the origination fee) for 80% LTV loans. The effective rate increased from the previous week.

• The average contract interest rate for 5/1 ARMs increased to 6.18% from 6.01%, with points decreasing to 1.16 from 1.25 (including the origination fee) for 80% LTV loans. The effective rate increased from the previous week.

MBA’s take:

“Mortgage rates edged higher the previous week, with the 30-year fixed mortgage rate’s increase to 6.93% leading to another decline in overall applications,” said Joel Kan, MBA’s vice president and deputy chief economist. “The purchase index decreased for the third straight week to its lowest level since the beginning of June and remains 26% behind last year’s levels. The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inventory and rates still close to 7% are crimping affordability for many potential homebuyers. The refinance market continues to feel the impact of these higher rates, and applications trailed last year’s pace by over 30% with many homeowners not looking for refinance opportunities.”