Mortgage applications

Average loan amounts also increased, with mean purchase sizes crossing back above the $400,000 mark.

Shares picked up across all federal categories last week, but overall application volumes fell, dragged down by a cooling conventional purchase market, according to the Mortgage Bankers Association.

Activity swung upward for the fourth week in a row, but a steeper drop in refinances led overall volumes down by a fraction from seven days earlier and 66% on an annual basis.

Another fall in interest rates spurred a gain in activity, but volumes are still almost 70% off levels from 12 months ago, the Mortgage Bankers Association said.

The national median payment grew to $2,012 last month from $1,941 in September, the Mortgage Bankers Association found.

Easing interest rates pushed purchases up, with their average loan size also declining to its lowest point since early 2021, but refinances fell again.

But refinances dwindled further and helped drive overall volumes to a slight decline last week.

High interest rates and affordability concerns continue to suppress purchase demand, though, leading overall numbers down again last week, the Mortgage Bankers Association reported.

Ongoing weakness in housing markets and the economy has now driven purchase activity to its lowest level since 2015, while overall application numbers decreased for the 10th time in 11 weeks.

The Fed's interest rate hikes are meant to tame inflation, but the secondary impacts on housing could give the central bank a reason to pump the brakes.

The mortgage market is reeling from the central bank's strategy of raising rates and reducing its holdings of mortgage-backed securities. Lenders face the worst headwinds in more than a decade.

Higher interest rates are driving borrowers to adjustable-rate loans, which saw close to a 13% share in weekly activity, the highest since 2008.

Softening prices have yet to lead to a turnaround in purchase activity, even as the average loan size fell under $400,000.

Decline was largely driven by a large dip in cash-out refinance locks.

The recent spike in interest rates has also led to elevated ARM activity, which accounted for over 10% of all applications.

The average purchase loan amount rose as a brief increase in demand for government-sponsored loan programs cooled.

Applications for these federal-backed loans headed upward after the Labor Day holiday but were offset by slowing conventional activity, sending overall volumes down for a fifth consecutive week, according to the Mortgage Bankers Association.

Declines in both purchases and refinances contributed to fractionally lower activity, as rising interest rates provided no relief.

Purchases have dropped in the last eight out of the last nine MBA weekly surveys, but decreased competition is leading to a pickup in the share of FHA originations.

Government-backed applications picked up despite rising rates last week, but a decline in conventional loans drove overall volumes down.