The Mortgage Bankers Association says mortgage applications witnessed a 2.3% decrease last week. This decline in the Market Composite Index, which gauges mortgage loan application volume, reflects a broader trend of challenges in the housing finance sector.
The decrease was observed on a seasonally adjusted basis, although the unadjusted Index saw a 2% increase over the previous week. The Refinance Index fell by 2% from the week before but was still 12% higher than the same period last year. Conversely, the seasonally adjusted Purchase Index saw a 3% decrease, with its unadjusted counterpart reporting a 4% rise week-over-week, albeit being 12% lower than the year-ago figure.
"Application activity was weaker last week, as mortgage rates moved higher across the board. The 30-year fixed mortgage rate was up to 6.87 percent – the highest rate since early December 2023,” MBA’s Vice President and Deputy Chief Economist Joel Kan said. “Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago.”
The refinance share of mortgage activity diminished to 34.2% of total applications, down from 35.4% the previous week. However, the share of adjustable-rate mortgages (ARMs) saw a slight uptick to 7% of total applications.
Among government loans, the Federal Housing Administration (FHA) loans experienced a minor increase in their share of total applications to 13.4%, up from 13.1%. Conversely, the Department of Veterans Affairs (VA) loans saw their share decrease to 13.1% from 14.1%, while the United States Department of Agriculture (USDA) loans maintained a steady share at 0.4%.
Interest rates across various mortgage types experienced increases. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.87%, and jumbo loan balances saw rates increase to 7%. FHA-backed 30-year fixed-rate mortgages also saw an uptick to 6.68%. The rates for 15-year fixed-rate mortgages and 5/1 ARMs climbed to 6.53% and 6.30%, respectively.
