After a period of relatively steady activity, home purchase applications fell back this week as mortgage rates reached recent multi-week highs.
The Mortgage Bankers Association (MBA) reports that the market composite index—the measure of mortgage loan activity volume—decreased 5.2% from one week earlier on a seasonally adjusted basis for the week ending Nov. 14, following last week’s 0.6% increase. On an unadjusted basis, the Index decreased 7% compared with the previous week.
“Mortgage rates increased for the third consecutive week, with the 30-year fixed rate inching higher to its highest level in four weeks at 6.37 percent,” said Joel Kan, MBA’s vice president and deputy chief economist. “Application activity over the week was lower, with potential homebuyers moving to the sidelines again, although there was a small increase in FHA purchase applications.
MBA said the refinance share of mortgage activity decreased to 55.4% of total applications from 55.6% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.5 percent of total applications.
Kan said the numbers indicate a return to caution on the part of borrowers.
“Refinance applications decreased as borrowers remain sensitive to even small increases in rates at this level,” said Kan. “The overall average loan size across both purchase and refinance applications dipped to its lowest level since August of this year, driven by another drop in the ARM share.”
The FHA share of total applications was the bright spot this week, MBA reported, with an increase to 19.9% from 19.4% the week prior. The VA share of total applications increased to 15.2% from 14.8% the week prior. The USDA share of total applications increased to 0.3% from 0.2% the week prior.
For the full report and more mortgage data from this past week, click here.
