Latest MBA Weekly Survey Shows Mortgage Applications Decrease

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Mortgage applications have decreased 6.9% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending October 1.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7% compared with the previous week. The Refinance Index decreased 10% from the previous week and was 16% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 13% lower than the same week one year ago. 

“Mortgage applications to refinance dropped almost 10 percent last week to the lowest level in three months, as the 30-year fixed rate increased to 3.14 percent – the highest since July,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Higher rates are reducing borrowers’ incentive to refinance, as declines were seen across all loan types. Purchase activity also fell, driven by a drop in conventional loan applications. Government purchase applications were up over 1 percent, but that was still not enough to bring down the average loan balance of $410,000. With home-price appreciation and sales prices remaining very elevated, applications for higher balance, conventional loans still dominate the mix of activity.” 

The refinance share of mortgage activity decreased to 64.5% of total applications from 66.4% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.4% of total applications. 

The FHA share of total applications increased to 10.5% from 10.4% the week prior. The VA share of total applications increased to 10.3% from 10.2% the week prior. The USDA share of total applications increased to 0.5% from 0.4% the week prior. 

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.14% from 3.10%, with points increasing to 0.35 from 0.34 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.20% from 3.14%, with points decreasing to 0.27 from 0.33 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.12% from 3.09%, with points increasing to 0.31 from 0.25 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.45% from 2.43%, with points decreasing to 0.24 from 0.29 (including the origination fee) for 80% LTV loans.

The average contract interest rate for 5/1 ARMs decreased to 2.54% from 2.77%, with points remaining unchanged at 0.16 (including the origination fee) for 80% LTV loans.

Image by Got Credit is licensed under CC BY 2.0

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