This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Refinance Applications Drop, Purchase Applications Rise: Survey

NEW YORK ( TheStreet) -- Refinance activity continued to drop, but purchase applications rose in a recent survey conducted by the Mortgage Bankers Association.

Mortgage applications in total decreased 2.5% in the week ended Aug. 23 from one week earlier. On an unadjusted basis, applications declined 3%.

The refinance index decreased 5%. The refinance share of mortgage applications dropped to 60%, the lowest share observed since April 2011.

Refinance activity has been steadily declining as rising rates make it less attractive for many borrowers. The average contract interest rate for the 30-year fixed-rate mortgage with conforming loan balances increased to 4.8% from 4.68%, the highest rate since April 2011.

Seasonally adjusted purchase applications, on the other hand, rose 2% from a week earlier. On an unadjusted basis, applications were up 0.3% and 6% higher from one year earlier.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.52%, the highest rate since July 2011, from 4.4%.

The average contract interest rate for 30-year jumbo loans rose from 4.74% to 4.78%.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.84%, the highest rate since April 2011, from 3.71%.

The drop in refinance activity is an earnings headwind for major mortgage banks including Wells Fargo (WFC - Get Report), JPMorgan Chase (JPM - Get Report), Bank of America (BAC - Get Report) and U.S.Bancorp (USB - Get Report)

-- Written by Shanthi Bharatwaj in New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.20 -1.00%
C $52.97 -0.58%
JPM $63.70 -0.67%
WFC $53.17 -0.69%
USB $42.28 -0.73%

Markets

Chart of I:DJI
DOW 16,450.39 -192.62 -1.16%
S&P 500 1,972.03 -16.84 -0.85%
NASDAQ 4,798.5040 -29.8210 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs