The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decline of 0.9% in the group’s seasonally adjusted composite index for the week ending August 16. Mortgage interest rates fell on two of five types loans the MBA tracks, rose on two others and remained unchanged on one.

On an unadjusted basis, the MBA’s composite index decreased by 2% in the past week. The seasonally adjusted purchase index decreased by 4% compared with the week ended August 9. The unadjusted purchase index also fell by 5% for the week and was 5% higher year over year.

Mortgage loan rates for a top-tier 30-year fixed-rate loan remained unchanged at 3.64% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 3.58% for that loan. The yield on a 10-year U.S. Treasury note dipped week-over-week from 1.65% to 1.55% as of last night’s close. A year ago, the 10-year note yielded 2.82%.

Joel Kan, MBA’s associate vice president of economic and industry forecasting, said:

In a week where worries over global economic growth drove U.S. Treasury yields 13 basis points lower, the 30-year fixed mortgage rate decreased just three basis points. As a result, the refinance index saw only a slight increase but remained at its highest level since July 2016. The small moves in rates and refinancing are potentially signs that lenders may be approaching capacity constraints as they continue to deal with the largest wave of refinance activity in three years. … Lower mortgage rates have yet to lead to a notable rise in homebuyer demand. Purchase applications fell more than 3 percent, but were still 5 percent higher than a year ago.

The MBA’s refinance index increased by 0.4% week over week, and the percentage of all new applications that were seeking refinancing rose from 61.4% to 62.7%. Refinancings have reached their highest levels since September 2016.

The prior week’s half-point drop in mortgage loan rates boosted refinancings by more than a third week over week. Falling interest rates have been the driving force behind the refinancings. As Wolfe Research’s Chris Senyek told Barron’s, however, cash-out refinancings have generated about $75 billion over the past 12 months. At the housing market peak in 2006, annualized cash-outs totaled $360 billion and most of that cash was spent. More than half of today’s cash-out totals is either saved or used to pay down debt, neither of which provides much stimulus to the economy, according to Senyek.

Adjustable-rate mortgage loans accounted for 6.4% of all applications, up by 0.4 percentage points compared with the prior week.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage fell from 3.93% to 3.90%. The rate for a jumbo 30-year fixed-rate mortgage remained unchanged at 3.88%. The average interest rate for a 15-year fixed-rate mortgage rose slightly from 3.28% to 3.30%.

The contract interest rate for a 5/1 adjustable-rate mortgage loan dipped from 3.43% to 3.35%. Rates on a 30-year FHA-backed fixed-rate loan increased from 3.81% to 3.87%.

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