Mortgage applications decreased 1.2% on a seasonally adjusted basis from one week earlier, according to Market Composite Index data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 9. This week’s results include an adjustment for the observance of Labor Day.
On an unadjusted basis, the index decreased 12% compared with the previous week. The Refinance Index decreased 4% from the previous week and was 83% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 0.2% from one week earlier. The unadjusted Purchase Index decreased 12% compared with the previous week and was 29% lower than the same week one year ago.
“The 30-year fixed mortgage rate hit the six percent mark for the first time since 2008 – rising to 6.01 percent – which is essentially double what it was a year ago,” observes Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Higher mortgage rates have pushed refinance activity down more than 80 percent from last year and have contributed to more homebuyers staying on the sidelines. Government loans, which tend to be favored by first-time buyers, bucked this trend and increased over the week, driven mainly by VA and USDA lending activity.”
“The spread between the conforming 30-year fixed mortgage rate and both ARM and jumbo loans remained wide last week, at 118 and 45 basis points, respectively,” adds Kan. “The wide spread underscores the volatility in capital markets due to uncertainty about the Fed’s next policy moves.”
The refinance share of mortgage activity decreased to 30.2% of total applications from 30.7% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.1% of total applications.
The FHA share of total applications increased to 13.4% from 13.3% the week prior. The VA share of total applications increased to 11.3% from 10.8% the week prior. The USDA share of total applications increased to 0.7% from 0.6% the week prior.