Mortgage application volume fell 5.1% last week as rates went back on the rise, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
For the week ended Oct. 4, applications for refinances plummeted 9% compared with the previous week but were up 159% compared with the same week one year ago.
Applications for purchases decreased 0.1% compared with the previous week but were up 8% compared with the same week one year ago.
The average rate for a 30-year, fixed-rate mortgage last week increased to 6.36% – up from 6.14% the previous week.
“In the wake of stronger economic data last week, including the September jobs report, mortgage rates moved higher, with the 30-year fixed rate rising to 6.36 percent – the highest since August,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Conventional loan refinances, which tend to have larger balances than government loans and hence are more responsive for a given change in mortgage rates, fell to a greater extent over the week. Purchase application volume was little changed over the week and was 8 percent above last year’s level.
“As we have highlighted before, the decision to buy a home is impacted by many factors, not just the level of mortgage rates,” Fratantoni adds. “The largest constraint for many prospective homebuyers over the past year had been the lack of inventory. Now, there are more homes available in many markets across the country, and with mortgage rates still low compared to recent history, at least some potential homebuyers are moving ahead.”
The refinance share of mortgage activity decreased to 52.4% of total applications, down from 54.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 5.9% of total applications.
Photo: Romain Dancre