Mortgage applications were essentially flat this week, decreasing only slightly, yet still reflecting buyer reservations, economists say, with rates hitting a four-month high and market volatility related to the election and the upcomingFed meeting.
According to the latest Weekly Applications Survey from the Mortgage Bankers Association, purchase applications fell for the fifth-straight week, down 0.1% from the previous week’s 6.7% decline for the week ending October 25, 2024.
“Mortgage applications were essentially flat last week as rates increased for the fourth time in five weeks, driven by bond market volatility in advance of the presidential election and the next FOMC meeting,” said Joel Kan, MBA’s vice president and deputy chief economist. “After a brief burst of activity in September when rates were almost 60 basis points lower, overall applications have declined 27%, driven by a pullback in refinances. Government refinances accounted for a large part of the decrease, dropping 12% over last week.”
Kan also noted the 30-year fixed rate mortgage, at 6.73%, was at its highest level since July 2024.
This week’s reported data shows the Market Composite Index, a measure of mortgage loan application volume, decreased 0.1% 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 decreased 6% from the previous week and was 84% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5% from one week earlier. The unadjusted Purchase Index increased 4% compared with the previous week and was 10% higher than the same week one year ago.
The MBA economist said first-time buyers will likely be a driver of purchase activity as inventory shifts to a more balanced supply.
“Purchase applications increased compared to a holiday-shortened week and were 10% higher than a year ago,” Kan added. “While near-term purchase application activity has weakened, we continue to expect housing demand from younger homebuyers to support purchase growth over the next few years as for-sale inventory loosens gradually.”
Additional data: The refinance share of mortgage activity decreased a notable 43.1% of total applications from 45.7% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4% of total applications.
Also: The FHA share of total applications decreased to 16.4% from 16.9% the week prior. The VA share of total applications decreased to 14.6% from 15.8% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.
Click here for this week’s full report.
