Mortgage application activity was mixed this week with overall purchase applications declining from last week, but a slight uptick in FHA loan applications and refinance applications still up significantly over last year indicates borrowers continue to look for ways to make homeownership more affordable.
The Mortgage Bankers Association (MBA) reports that the market composite index—the measure of mortgage loan activity volume—decreased 1.9% on a seasonally adjusted basis for the week ending Oct. 31 following last week’s 7.1% increase. On an unadjusted basis, the Index decreased 3 percent compared with the previous week.
“Mortgage rate movements were mixed last week as Treasury yields moved slightly higher following last week’s FOMC meeting,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed rate was mostly unchanged at 6.31 percent and remained close to the lowest level in over a year.”
The Refinance Index decreased 3% from the previous week and was 151% higher than the same week one year ago, MBA reported. The seasonally adjusted Purchase Index decreased 1% from one week earlier, while the unadjusted Purchase Index decreased 2% compared with the previous week and was 26% higher than the same week one year ago. Kan said the data shows signs that affordability is still a challenge for borrowers.
“Despite a decline last week, refinance applications are still significantly higher than a year ago,” Kan said. “The average loan size for refinance applications was at its highest level in six weeks, as borrowers with larger loans continued to seek ways to lower their monthly payments.”
He added, “Purchase applications declined slightly from a week ago, however, there was a slight increase in FHA purchase applications as prospective homebuyers continue to seek loan options to help manage challenging affordability conditions.”
The share of refinance applications decreased to 57% of total applications, down only slightly from last week’s share of 57.1%.
Activity for adjustable-rate mortgages (ARM) decreased to 8.7% of total applications.
VA loans saw total applications increase to 14.9% from 13.4% the week prior, MBA reported, while the USDA share of total applications increased to 0.3% from 0.2% the week prior.
For more mortgage data and the full report, click here.
