• Applications for both purchase and refinancing loans fell.

• The rate on the 30-year fixed-rate mortgage declined and is only 3 basis points above its all-time low reached on August 7.

Even though fixed mortgage interest rates fell to near historical lows, the Mortgage Bankers Association Mortgage Applications Index decreased 2.0% w/w (+35.2% y/y) in the week ended August 28 following a 6.5% w/w drop in the previous week. This was the fifth weekly decline in the past six weeks. Lenders are reporting that demand for home buying continues to come from delayed activity from the spring as well as households seeking more space in less densely populated areas.

Applications for both purchase and refinancing loans fell in the most recent week. Applications for purchase loans edged down 0.2% w/w (+27.6% y/y) in the week ended August 28 versus a 0.4% w/w increase in the previous week. Refinancing applications fell 3.1% w/w (+40.1% y/y) in the most recent week after a 10.2% w/w drop in the previous week. This was the fifth weekly decline for refinancing applications in the past six weeks. The refinance share of mortgage activity decreased to 62.5%t of total applications from 62.6% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.6% of total applications.

The average mortgage loan size slipped 0.5% w/w to $326,200 in the week ended August 28 from $327,900 the previous week. The average size of a purchase loan rose 0.3% to $368,000 from $366,800 while the average loan to refinance fell 1.1% to $301,100 from $304,600.

Interest rates slipped for the second consecutive week, with the 30-year fixed rate at 3.19% in the August 28 week versus 3.22% the week before, just 3 basis points above its historical low reached in the week of August 7. The rate on 15-year loans fell to 2.76%, returning to its record low, from 2.80% the previous week. After having jumped up 18 basis points to 3.29% in the previous week, the rate on the 5-year adjustable rate mortgage receded to 3.24%

Applications for fixed-rate loans were up 39.6% y/y, while applications for adjustable rate mortgages fell 37.2% y/y.

The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.