The Mortgage Bankers Association's (MBA) weekly survey revealed a continued decline in U.S. mortgage applications for the third consecutive week, despite a rise in purchasing activity.
For the week ending in July, mortgage applications dropped by 0.2 percent from the previous week, which had seen a 2.6 percent decline. The results for this latest week were adjusted to account for the July 4th holiday, according to the MBA.
The Market Composite Index, which tracks the volume of mortgage loan applications, fell by 0.2 percent on a seasonally adjusted basis, and by 20 percent on an unadjusted basis compared to the prior week.
The Refinance Index decreased by 2 percent from the previous week, although it was 28 percent higher than the same week in the previous year. This marks the fourth consecutive week of a decline in refinance applications, correlating with rising interest rates.
"Despite the significant gains in home equity over recent years, current rates offer minimal incentive for most borrowers to refinance," said Joel Kan, MBA Vice President and Deputy Chief Economist.
The seasonally adjusted Purchase Index saw a 1 percent increase from the previous week, although it was down 19 percent on an unadjusted basis.
The average interest rate for a 30-year fixed-rate mortgage slightly decreased to 7.00 percent from 7.03 percent the previous week.
"The recent rise in mortgage rates has tempered demand. Mortgage applications were mostly unchanged last week as rates hovered around 7 percent," Kan noted. "There was a slight uptick in purchase activity, driven primarily by increases in FHA and VA applications."
