Mortgage applications have seen a decrease of 1% for the week ending Oct. 20, 2023, as per the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. The Market Composite Index, which measures the volume of mortgage loan applications, also dropped 1% on a seasonally adjusted basis from the previous week.
While the Refinance Index showed a minor increase of 2% from the prior week, it still lags 8% behind the same week of the previous year. The Purchase Index dipped 2%, and compared to the same week in the previous year, it was down by a significant 22%.
“Ten-year Treasury yields climbed higher last week, as global investors remained concerned about the prospect for higher-for-longer rates and burgeoning fiscal deficits. Mortgage rates followed Treasuries higher, with the 30-year fixed mortgage rate jumping 20 basis points to 7.9 percent – the highest since 2000. Rates have now risen seven consecutive weeks at a cumulative amount of 69 basis points,” said Joel Kan, MBA’s deputy chief economist. “Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995. These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity. The ARM share of applications inched up to 9.5 percent, its highest since November 2022.”
This rate surge has significantly hampered potential homebuyers from entering the market and has suppressed refinance activities. Notably, the ARM (adjustable-rate mortgage) share of applications has reached 9.5%, marking its highest point since November 2022.
Other notable metrics from the report include:
- Refinance share of mortgage activity increased to 31.4%.
- FHA's share of total applications rose to 15.2%.
- VA's share dipped slightly to 10.5%.
- USDA's share decreased to 0.4%.
Interest rates across multiple mortgage categories also saw a notable uptick:
- The average rate for 30-year fixed-rate mortgages with conforming loan balances surged to 7.90%.
- Jumbo loan balances for the same term grew to 7.78%.
- FHA-backed 30-year fixed-rate mortgages rose to 7.52%.
- 15-year fixed-rate mortgages saw an increase, reaching 7.08%.
- The 5/1 ARM interest rates elevated to 6.99%.
