Applications continue downward trend.
Refinance applications posted their fourth weekly decline, with refi loan count falling to a new record low.
Fannie Mae’s latest refinance application-level index (RALI), which tracks refinance activity and historical trends, showed that dollar volume fell 3.6% for the week ending September 2. Compared to this time last year, the RALI dollar volume was down 78% and was 4.8% below its four-week average.
“Refinance applications decreased for the fourth consecutive week,” said Doug Duncan, chief economist of Fannie Mae. “Since the beginning of August, with mortgage rates moving up, refinance application dollar volume has declined by 18%, reaching its lowest level since January 2019.”
Historical comparisons show that the dollar volume of refinance applications was 82.9% lower than the refi boom seen in the third quarter of 2020. However, it was up 17.6% from the refi slowdown during the fourth quarter of 2018.
Duncan also noted a significant decline in the RALI count, which dropped 3.3% week over week and was down 76.6% year over year.
“Excluding holiday-impacted weeks, the RALI loan count is now lower than the lowest levels of the refi slowdown in the fourth quarter of 2018,” he said.
Purchase mortgage applications also continued to decrease last week. According to the Mortgage Bankers Association, purchase activity dipped 1% on a seasonally adjusted basis.
“Recent economic data will likely prevent any significant decline in mortgage rates in the near term, but the strong job market depicted in the August data should support housing demand,” said MBA chief economist Mike Fratantoni. “There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity.”