The Market Composite Index, a measure of mortgage loan application volume, decreased 0.5% on a seasonally adjusted basis from one week ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 28.
On an unadjusted basis, the Index decreased 1% compared with the previous week. The Refinance Index increased 0.2% from the previous week and was 85% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 41% lower than the same week one year ago.
“Mortgage applications declined for the sixth consecutive week despite a slight drop in rates. The 30-year fixed rate decreased for the first time in over two months to 7.06 percent, but remained close to its highest since 2002,” says Joel Kan, MBA’s vice president and deputy chief economist. “Apart from the ARM loan rate, rates for all other loan types were more than three percentage points higher than they were a year ago. These elevated rates continue to put pressure on both purchase and refinance activity and have added to the ongoing affordability challenges impacting the broader housing market, as seen in the deteriorating trends in housing starts and home sales.
“With most homeowners locked into significantly lower rates, refinance applications continued to run more than 80 percent below last year’s pace, while the refinance share of applications was 28.6 percent – the fifth straight week below 30 percent,” adds Kan.
The refinance share of mortgage activity increased to 28.6% of total applications from 28.2% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 11.8% of total applications.
The FHA share of total applications decreased to 13.5% from 13.9% the week prior. The VA share of total applications decreased to 10.3% from 10.7% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.