Mortgage loan application volume fell 6.9% last week, the Mortgage Bankers Association’s (MBA) weekly survey reports.
The Market Composite Index, which measures application volume, fell 6.9% on an adjusted basis. On an unadjusted basis, they fell 7% from the week before, which is 13% lower year over year. The share of refinancing applications fell 10% and was 16% lower than a year ago.
The seasonally adjusted Purchase Index fell 2%, while the unadjusted Purchase Index fell 2% compared to the week before, down 13% from the previous year.
“Mortgage applications to refinance dropped almost 10 percent last week to the lowest level in three months, as the 30-year fixed-rate increased to 3.14 percent – the highest since July. Higher rates are reducing borrowers’ incentive to refinance, as declines were seen across all loan types,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“Purchase activity also fell, driven by a drop in conventional loan applications. Government purchase applications were up over 1 percent, but that was still not enough to bring down the average loan balance of $410,000. With home-price appreciation and sales prices remaining very elevated, applications for higher balance, conventional loans still dominate the mix of activity.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.14%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances increased to 3.20% from 3.14%
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.12% from 3.09%.
Here are some highlights from the survey:
- Refinance share of mortgage activity: 64.5% (-1.9%)
- FHA share of total applications: 10.5% (+0.1%)
- VA share: 10.3% (+0.1%)
- USDA share: 0.5% (+0.1%)