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Mortgage Refinance Applications Recede

New applications for residential loans were down by more than a tenth on a week-over-week basis, with refinance activity suffering the biggest setback.

A seasonally adjusted 11 percent decline from one week previous was recorded for the Market Composite Index for the week that ended on July 22.

The weekly index, which is a measure of mortgage loan application volume, was also down 11 percent from the last report without seasonal adjustments.

The Mortgage Bankers Association publishes the index in its
Weekly Mortgage Applications Survey, which is reportedly determined from a 75 percent sampling of all U.S. retail residential mortgage applications.

Seasonally adjusted refinance applications fell 15 percent from the week ended July 15. Refinance share was reduced to 61.1 percent from 64.2 percent one week earlier.

Still, refinance share was wider than 50.6 percent one year earlier.

Purchase-money loan applications slipped 3 percent from one week prior with or without seasonal adjustments. Setting aside seasonal adjustments,
purchase financing activity has increased 12 percent from the same week in 2015.

At 10.1 percent, FHA share was wider than 9.9 percent in the report seven days earlier. FHA share has descended from 13.7 percent in the report from this week last year.

Another 11.9 percent of applications were for VA mortgages. VA share widened from 11.2 percent and from 10.9 percent during the same period in 2015.

Fixed rates on
jumbo mortgages were 2 basis points less than conforming interest rates. The jumbo-conforming spread swung from a positive 1 basis point and was thinner than the negative 5-basis-point spread 52 weeks previous.

Applications for adjustable-rate mortgages made up 4.7 percent of all applications. ARM share retreated from
5.1 percent in the previous report and 6.6 percent in the year-previous report.

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