Mortgage applications increased 0.3% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending October 22.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.2% compared with the previous week. The Refinance Index decreased 2% from the previous week and was 26% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 4% from one week earlier. The unadjusted Purchase Index increased 3% compared with the previous week and was 9% lower than the same week one year ago.
“Mortgage rates increased again last week, as the 30-year fixed rate reached 3.30 percent and the 15-year fixed rate rose to 2.59 percent – the highest for both in eight months,” explains Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The increase in rates triggered the fifth straight decrease in refinance activity to the slowest weekly pace since January 2020.”
“Higher rates continue to reduce borrowers’ incentive to refinance,” Kan adds. “Purchase applications picked up slightly, and the average loan size rose to its highest level in three weeks, as growth in the higher price segments continues to dominate purchase activity. Both new and existing-home sales last month were at their strongest sales pace since early 2021, but first-time home buyers are accounting for a declining share of activity. Home prices are still growing at a rapid clip, even if monthly growth rates are showing signs of moderation, and this is constraining sales in many markets, and particularly for first-timers.”
The refinance share of mortgage activity decreased to 62.2% of total applications from 63.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.1% of total applications.
The FHA share of total applications increased to 10.4% from 10.2% the week prior. The VA share of total applications increased to 10.6% from 10.4% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.