Mortgage applications decreased last week from the previous week, led by a drop in purchase loan requests.
The Mortgage Bankers Association's index revealed that loan application volume fell 3.6% on a seasonally adjusted basis for the period ending July 11 after increasing the previous week, which included an adjustment for the July 4 holiday.
The dip in mortgage activity was mainly attributed to an 8% decline in purchase applications. These applications, where the average loan size sought was $268,500, plunged to their lowest level since February, the Washington-based trade group said on Wednesday.
Meanwhile, refinance activity was only down 0.1% from the prior week.
Refis accounted for 54% of total mortgage applications, a two percentage point uptick from the week before, while adjustable-rate mortgages remained unchanged and represented 8% of total applications.
"While we try not to put too much focus on week-to-week fluctuations, it can be disappointing to see any substantial drop in purchase activity," said Bill Banfield, a vice president at Quicken Loans. Still, "based on where the July 4 holiday fell this year, it's possible many homebuyers were enjoying a vacation with their family instead of applying for a mortgage."
The average rate on a 30-year fixed-rate mortgage was up one basis point to 4.33%. A 30-year mortgage backed by the Federal Housing Administration saw its average interest rate increase two basis points to 4.04%. Homeowners applying for a 15-year fixed-rate mortgage saw average interest rates rise one basis point to 3.41%, the MBA said.