Mortgage loan application volume fell 2.8% last week, driven again by low refinance applications, the Mortgage Bankers Association’s (MBA) weekly survey reported.
The Market Composite Index, which measures application volume, fell 2.8% on an adjusted basis. The Refinance Index dropped 5% and was 31% lower than a year ago, rebounding from last week’s drop to its lowest level since July 2021.
The seasonally adjusted Purchase Index rose 2%, while the unadjusted Purchase Index fell 2% compared to the week before, down 6% from the previous year.
“Refinance applications decreased for the seventh time in eight weeks, as mortgage rates moved higher after two weeks of declines,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
But the refinance lull has been partially offset by the increase in purchase applications.
“Purchase applications increased for both conventional and government loan segments, as housing demand continues to show resiliency at a time – late fall – when home buying activity typically slows. The second straight increase in purchase applications suggests that stronger sales activity may continue in the weeks to come,” he said.
Mortgage applications for new home purchases increased 6% from September to October. In a normal year, there would have been a month-over-month decrease. The increase from September puts MBA’s estimate of new home sales at its strongest pace since January 2021.
Homes continue to sell quickly, with a typical home spending just one week on the market before going under contract, according to a report from the National Association of Realtors (NAR).
Jessica Lautz, vice president of demographics and behavioral insights at NAR, noted that the pandemic has shaken up traditional buying behavior.
“Home sellers have historically moved when something in their lives changed – a new baby, a marriage, a divorce, or a new job,” Lautz said. “The pandemic has impacted everyone, and for many, this became an impetus to sell and make a housing trade.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.20%.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances remained unchanged at 3.26%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose from 3.18% to 3.23%.