Mortgage applications decreased 1.7% on a seasonally adjusted basis from a week ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 21.
On an unadjusted basis, the index decreased 2% compared with the previous week.
The Refinance Index increased 0.1% from the previous week and was 86% lower than the same week one year ago.
The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index decreased 3% compared with the previous week and was 42% lower than the same week one year ago.
“Mortgage rates increased for the 10th consecutive week, with the 30-year fixed rate reaching 7.16 percent, the highest rate since 2001. The ongoing trend of rising mortgage rates continues to depress mortgage application activity, which remained at its slowest pace since 1997,” says Joel Kan, MBA’s vice president and deputy chief economist. “Refinance applications were essentially unchanged, but purchase applications declined 2 percent to the slowest pace since 2015 – over 40 percent behind last year’s pace. Despite higher rates and lower overall application activity, there was a slight increase in FHA purchase applications, as FHA rates remained lower than conventional loan rates.
“MBA’s forecast expects both economic and housing market weakness in 2023 to drive a 3 percent decline in purchase originations, while refinance volume is anticipated to decline by 24 percent,” adds Kan.
The refinance share of mortgage activity increased to 28.8% of total applications from 28.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 12.7% of total applications.
The FHA share of total applications increased to 13.9% from 13.6% the week prior. The VA share of total applications remained unchanged at 10.7% from the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.
Image: Ian MacDonald on Unsplash
