Another down week for mortgage demand

MBA’s refinance index posted a 4% week-over-week decrease, while the purchase index inched up 0.2% on a seasonally adjusted basis. When unadjusted, however, purchase activity was down 12% weekly and 29% annually.

The refinance share of total mortgage applications fell five basis points to 30.2%, while the adjustable-rate mortgage (ARM) share of activity increased to 9.1%. The FHA and USDA shares of activity both climbed one basis point to 13.4% and 0.7%, and the VA share rose five basis points to 11.3%.

“Government loans, which tend to be favored by first-time buyers, bucked this trend and increased over the week, driven mainly by VA and USDA lending activity,” Kan added. “The spread between the conforming 30-year fixed mortgage rate and both ARM and jumbo loans remained wide last week, at 118 and 45 basis points, respectively. The wide spread underscores the volatility in capital markets due to uncertainty about the Fed’s next policy moves.”