After a 6.9% decrease last week and hitting a 28-year low, mortgage applications dipped another 1.0% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending October 20, 2023.
Here are this week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 1.0% 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 increased 2% from the previous week and was 8% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 2% from one week earlier.
- The unadjusted Purchase Index decreased 2% compared with the previous week and was 22% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 31.4% of total applications from 30.5% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 9.5% of total applications.
- The FHA share of total applications increased to 15.2% from 14.8% the week prior.
- The VA share of total applications decreased to 10.5% from 10.7% 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 ($726,200 or less) increased to 7.90% from 7.70%, with points increasing to 0.77 from 0.71 (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 $726,200) increased to 7.78% from 7.56%, with points decreasing to 0.71 from 0.85 (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 7.52% from 7.36%, with points increasing to 1.15 from 1.02 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 7.08% from 6.98%, with points increasing to 1.42 from 1.04 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Ten-year Treasury yields climbed higher last week, as global investors remained concerned about the prospect for higher-for-longer rates and burgeoning fiscal deficits. Mortgage rates followed Treasuries higher, with the 30-year fixed mortgage rate jumping 20 basis points to 7.9%—the highest since 2000. Rates have now risen seven consecutive weeks at a cumulative amount of 69 basis points,” said Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995. These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity. The ARM share of applications inched up to 9.5%, its highest since November 2022.”
