Hitting their third week of declines, mortgage applications decreased another 2.1% from the previous week’s slight 0.1% dip, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending October 27, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 2.1% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 3% compared with the previous week.
- The Refinance Index decreased 4% from the previous week and was 12% lower 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 22% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 31.2% of total applications from 31.4% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 10.7% of total applications.
- The FHA share of total applications decreased to 14.7% from 15.2% the week prior.
- The VA share of total applications decreased to 10.1% from 10.5% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.86% from 7.90%, with points decreasing to 0.73 from 0.77 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 7.80% from 7.78%, with points decreasing to 0.67 from 0.71 (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 7.57% from 7.52%, with points decreasing to 1.03 from 1.15 (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 7.14% from 7.08%, with points decreasing to 1.22 from 1.42 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
- The average contract interest rate for 5/1 ARMs decreased to 6.77% from 6.99%, with points increasing to 1.46 from 0.68 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage applications declined for the third straight week as mortgage rates remained elevated, with all rates around 30 basis points higher than they were a month ago. The 30-year fixed rate dipped slightly to 7.86% but remained close to 23-year highs and has been above the 7-percent level since early August 2023,” said Joel Kan, MBA’s vice president and deputy chief economist. “The impact of higher rates continued to be felt across both purchase and refinance markets. Purchase applications decreased to their lowest level since 1995 and refinance applications to the lowest level since January 2023. Applications for government loans saw much larger weekly declines than conventional, with government purchase applications down 3% and refinances down 9%.”
Added Kan, “As higher rates continue to impact affordability and purchasing power, ARM loans increased almost 10% last week and continued to gain share, growing to 10.7% of all applications.”
