The smallest amount of prospective buyers submitted mortgage applications since this past July for the week ending Oct. 18.
The Mortgage Bankers Association (MBA) released its Weekly Applications Survey Wednesday, indicating that mortgage loan application volume fell by 6.7% on a seasonally adjusted basis from the week prior. This was – however, less of a drop than last week when application volume fell by 17%.
“Mortgage rates saw mixed results last week, but the 30-year fixed rate remained unchanged at 6.52%. Application activity decreased to its lowest level since July, as both purchase and refinance applications saw declines,” said MBA’s Vice President and Deputy Chief Economist Joel Kan. “Purchase applications continued to run stronger than last year’s pace for the fifth consecutive week. Even though rates have been on a recent upswing, they are over a full percentage point lower than a year ago, which has kept some homebuyers in the market. For-sale inventory has started to loosen, and home-price growth has eased in some markets, providing more options for buyers in combination with these lower rates.”
The MBA’s Refinance Index fell by 8% from the previous week and was 90% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 3% higher than the same week one year ago.
The share of refinance activity decreased to 45.7% of total mortgage applications, down from 46.5% the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity increased to 6.1% of total applications.
The FHA share of total applications increased to 16.9% from 15.9% the week prior. The VA share of total applications decreased to 15.8% from 16.2% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) remained unchanged at 6.52%, with points decreasing to 0.64 from 0.65 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.
