U.S. Mortgage Applications Dip in Mid-July

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 11, 2014, mortgage applications decreased 3.6 percent from one week earlier. The previous week's results included an adjustment for the July 4th holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 20 percent compared with the previous week.

The Refinance Index decreased 0.1 percent from the previous week.  The seasonally adjusted Purchase Index decreased 8 percent from one week earlier to the lowest level since February 2014.  The unadjusted Purchase Index increased 16 percent compared with the previous week and was 17 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 54 percent of total applications from 52 percent the previous week.  The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.  The average loan size for purchase applications was $268,500, the lowest amount since February 2014.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.33 percent from 4.32 percent, with points increasing to 0.20 from  0.16 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.23 percent from 4.24 percent, with points increasing to 0.26 from 0.16 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.04 percent from 4.02 percent, with points increasing to 0.02 from -0.03 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.41 percent from 3.40 percent, with points increasing to 0.23 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.17 percent from 3.24 percent, with points increasing to 0.34 from 0.31 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.