Mortgage applications decreased 1.1% from one week ago, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending September 24.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1% compared with the previous week. The Refinance Index decreased 1% from the previous week and was 0.4% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index decreased 2% compared with the previous week and was 12% lower than the same week one year ago.
“Increased optimism about the strength of the economy pushed Treasury yields higher following last week’s FOMC meeting. Mortgage rates in response rose across all loan types, with the benchmark 30-year fixed rate reaching its highest level since early July 2021,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The increase in rates – mostly later in the week – led to a decrease in both purchase and refinance applications, with a prominent decline in government loan applications. Conventional loan applications increased, driven by a rise in conventional refinances. This was perhaps a sign that some borrowers reacted to higher rates and decided to refinance.”
“With home-price appreciation continuing to run hot, increasing more than 19 percent annually in July, applications for larger loan amounts continue to outpace lower-balance loans,” adds Kan. “The average loan size for a purchase application reached $410,000, its highest level since May 2021.”
The refinance share of mortgage activity increased to 66.4% of total applications from 66.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.4% of total applications.
The FHA share of total applications decreased to 10.4% from 11.5% the week prior. The VA share of total applications decreased to 10.2% from 10.4% the week prior. The USDA share of total applications decreased to 0.4% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.10% from 3.03%, with points increasing to 0.34 from 0.30 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.14% from 3.11%, with points increasing to 0.33 from 0.25 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.09 percent from 3.07 percent, with points remaining unchanged at 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 2.43 percent from 2.34%, with points increasing to 0.29 from 0.24 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 2.77% from 2.51%, with points increasing to 0.16 from 0.12 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
Image: “Mortgage Cloud” by Got Credit is licensed under CC BY 2.0
