Mortgage application volume plummeted 10.1% on an adjusted basis during the week ended Sept. 20, as the average rate for a 30-year fixed rate mortgage increased slightly to 4.02%, up from 4.01% the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances fell 15% but were nonetheless up 104% compared with the same week one year earlier.
Applications for purchases decreased 3% compared with the previous week.
On an unadjusted basis, total volume fell 11% compared with the previous week. Applications for purchases decreased 4% compared with the previous week, on an unadjusted basis, but were 9% higher compared with the same week one year earlier.
“U.S. Treasury yields trended downward over the course of last week, as the Federal Reserve meeting highlighted the elevated uncertainty in the economic outlook,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “However, despite falling yields, mortgage rates ticked up again and have risen 20 basis points over the past two weeks.
”The increase in rates led to fewer refinances, and activity has now dropped 17 percent over the last two weeks,” Kan says. “Purchase applications also decreased, likely related to the two-week jump in rates, but still remained nine percent higher than last year. The recent data on increased existing-home sales and new residential construction points to the underlying strength in the purchase market this fall.”
The refinance share of mortgage activity decreased to 54.9% of total applications, down from 57.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 5.1% of total applications.