The Mortgage Bankers Association (MBA) says the pace of mortgage applications slowed for a fourth consecutive time during the week ended September 2. MBA’s seasonally adjusted Market Composite Index, a measure of application volume, decreased 0.8 percent heading into the long Labor Day holiday weekend. On an unadjusted basis, the Index decreased 2 percent compared to the prior week.

The Refinance Index dipped another 1 percent, putting it 83 percent lower than during the same week in 2021.  The refinance share of mortgage activity increased to 30.7 percent of total applications from 30.3 percent the previous week. At this point last year, refinancing made up 66.8 percent of total application volume.

The Purchase Index decreased 1 percent on a seasonally adjusted basis and 3 percent before adjustment compared to the previous week. It was 23 percent lower than the same week in 2021.

Mortgage rates moved higher over the course of last week as markets continued to re-assess the prospects for the economy and the path of monetary policy, with expectations for short-term rates to move and stay higher for longer,” said Mike Fratantoni, MBA Senior Vice President, and Chief Economist. “With the 30-year fixed rate rising to the highest level since mid-June, application volumes for both purchase and refinance loans dropped.  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. 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.”