Federal housing programs and predatory lending still stand in the way of black homeownership.
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Mortgage applications fell 1.4% on a seasonally-adjusted basis for the week ending July 26th, 2019, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, fell 1% from the previous week. The Refinance Index rose by 0.1% over the same period, and both the seasonally-adjusted and the unadjusted Purchase Index fell 3%.

“Mortgage applications were lower last week, driven by a 3% decrease in purchase applications. While purchase activity was still up 6% from a year ago, the index has now decreased for three straight weeks and reached its lowest point since March. Despite healthy demand, inadequate supply levels continue to hold back some would-be buyers,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Rate movements were mixed, with the 30-year fixed rate remaining unchanged (at 4.08%), but the FHA rate decreasing to its lowest level since 2017 to 3.94%.”

The refinance share of mortgage activity rose to 50.5% of applications, up from 49.8% the previous week. The adjustable-rate mortgage share of activity remained unchanged at 4.7%. The FHA share remained unchanged at 11.3%, the VA share fell to 12.6% from 13.1%, and the USDA share remained unchanged at 0.6%.

“Refinance applications were essentially flat, but the components told different stories,” Kan adds. “Conventional refinances were up 1.1%, but government refinances were down almost 3% – led by a drop in VA applications.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remained unchanged at 4.08%. Points for 80% loan-to-value ratio (LTV) loans rose to 0.34 from 0.33 the previous week. (All 80% LTV loan reports include the origination fee.) The effective rate remained unchanged.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) remained unchanged at 4.04%. Points for 80% LTV loans fell to 0.22 from 0.25, and the effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 3.94%, the lowest level since September 2017, from 3.98%. Points for 80% LTV loans fell to 0.29 from 0.31, and the effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages rose to 3.48% from 3.45%. Points for 80% LTV loans fell to 0.26 from 0.32, and the effective rate increased from last week.

The average contract interest rate for 5/1 ARMs fell to 3.52% from 3.57%. Points for 80% LTV loans rose to 0.31 from 0.27, and the effective rate decreased from last week.