Mortgage applications during the week of August 5 continued nose-diving by -3%, compared to its downward trend the previous week. Comparing the same week one year ago, mortgage applications fell -17%, according to the Mortgage Bankers Association (MBA).
Meanwhile, according to CoreLogic, prices in June 2018 soared +6.8% compared with prices one year ago and experts say that these soaring prices are sapping mortgage demand.
Joel Kan, vice president of economic and industry forecasting with the MBA, said, “Despite recent data indicating a strong US economy and job market, including signs of wage growth, overall mortgage applications fell for the third consecutive week as housing continues to be hampered by lack of homes for sale and crimped affordability.”
Under the mortgage umbrella, mortgage applications from new buyers looking to buy homes decreased in purchase volumes by -2% from the week before and -2% from the year before. Additionally, applications for the adjustable rate mortgage share of mortgage activity, usually new buyers, decreased to 63% of the total application pool.
The refinance share of mortgage activity also decreased to 36.6% of total applications from 37.1% the previous week. This 36.6% of refinance mortgage applications is, according to the Refinance Index, staying close to its lowest levels since December 2006, according to Kan.
Combining both purchase and refinance mortgage applications, the Market Index for total mortgage applications decreased to its lowest level since January 2016.
The volume of mortgage applications is one of several key indicators of housing market health. AS this volume continues to fluctuate, we’ll continue to update you.