Mortgage applications have dipped 2.1% in the past week, as reported by the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Oct. 27, 2023.
This downward trend was also observed in the Market Composite Index, a key metric that measures mortgage loan application volume, which decreased by 2.1% on a seasonally adjusted basis. Without adjustments, the index witnessed a 3% drop from the week before. Meanwhile, the Refinance Index saw a reduction of 4% weekly and was down 12% compared to the same period last year.
The 30-year fixed rate dipped slightly to 7.86% but remained close to 23-year highs and has been above the 7% level since early August 2023,” said Joel Kan, MBA’s deputy chief economist. “The impact of higher rates continued to be felt across both purchase and refinance markets. Purchase applications decreased to their lowest level since 1995, and refinance applications to the lowest since January 2023. Applications for government loans saw much larger weekly declines than conventional, with government purchase applications down 3% and refinances down 9%."
Government loans, as opposed to conventional loans, experienced steeper declines.
Highlighting the increase in adjustable rate mortgages (ARM), Kan added, “As higher rates continue to impact affordability and purchasing power, ARM loans increased almost 10% last week and continued to gain share, growing to 10.7% of all applications.”
Other key takeaways include:
- The refinance share of mortgages edged down to 31.2% from 31.4% the prior week.
- The FHA share dropped to 14.7%, VA share to 10.1%, and the USDA share increased to 0.5%.
- The interest rate for 30-year fixed-rate mortgages with conforming loan balances came down to 7.86%. In contrast, those with jumbo loan balances saw an uptick to 7.80%.
- The rate for 30-year fixed-rate mortgages supported by the FHA grew to 7.57%, while 15-year fixed-rate mortgages climbed to 7.14%.
- The rate for 5/1 ARMs dropped to 6.77%, although the effective rate saw an increase from the previous week.
