US mortgage application demand continues to cool

Kan also noted that purchase loan size shrank from its record high a few months ago.

“After reaching a record $460,000 in March 2022, the average purchase loan size was $415,000 last week, pulled lower by the potential moderation of home-price growth and weaker purchase activity at the upper end of the market,” he said.

On the other hand, refinance applications edged up 2% week over week. Consequently, the refi share of mortgage activity increased from 29.6% to 30.8% of total applications. By dollar volume, refinance applications were up 0.3%, according to Fannie Mae.

“Refinance applications increased slightly last week, driven by an uptick in conventional and FHA refinances. The overall refinance index remained 5% below the average level reported in June,” Kan said. “With the 30-year fixed rate 265 basis points higher than a year ago, refinance applications are expected to remain depressed.”