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Mortgage rates held steady this week.  Overall inflation grew an underwhelming 0.2 percent year-over-year in July, but core inflation remains steady at 1.8 percent keeping chances alive for a potential rate hike in September. Housing markets have responded positively to low mortgage rates -- the 30-year fixed mortgage rate has been below four percent for five consecutive weeks.

  • 30-year fixed-rate mortgage (FRM) averaged 3.93 percent with an average 0.6 point for the week ending Aug. 20, 2015, down from last week when it averaged 3.94 percent. A year ago at this time, the 30-year FRM averaged 4.10 percent.
  • 15-year FRM this week averaged 3.15 percent with an average 0.6 point, down from last week when it averaged 3.17 percent. A year ago at this time, the 15-year FRM averaged 3.23 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.94 percent this week with an average 0.5 point, up from last week when it averaged 2.93 percent. A year ago, the 5-year ARM averaged 2.95 percent.
  • 1-year Treasury-indexed ARM averaged 2.62 percent this week with an average 0.3 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.38 percent.

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Meanwhile, refinances fueled a noticeable increase in applications, according to the latest data from the Mortgage Bankers Association. In fact, the market composite index increased 3.6 percent from the week before. The refinance index rose 7 percent, while the purchase index fell 1 percent.

"The pick-up in refinance activity was led by larger loan sizes on average, as continued investor interest drove jumbo interest rates down even further," Lynn Fisher, MBA's vice president of research and economics said in a statement.