Application volume falls as rates rise to three-month high
Mortgage rates rose to their highest level since July, leading to a 2.6% decrease in loan applications from one week earlier, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Oct. 27 found that the refinance index decreased 5% from the previous week.
The refinance application share decreased to 48.7% from 49.5% the previous week.
The seasonally adjusted purchase index decreased 1% from one week earlier. The unadjusted purchase index decreased 2% compared with the previous week and was 10% higher than the same week one year ago.
The market composite index, a measure of mortgage loan application volume, decreased 3% on an unadjusted basis from one week earlier.
Adjustable-rate loan application activity increased to 6.8% from 6.4%, while the share for Federal Housing Administration-guaranteed loans increased to 10.4% from 9.8%.
The share of applications for Veterans Affairs-guaranteed loans decreased to 9.9% from 10.1% and the U.S. Department of Agriculture/Rural Development share increased to 0.8% from 0.7%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased 4 basis points to 4.22%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100), the average contract rate increased 5 basis points to 4.16%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 3 basis points to 4.07%.
For each of the above loan types, the interest rates were at their highest level since July, the MBA said.
For 15-year fixed-rate mortgages the average interest rate increased 4 basis points to 3.52% and the average contract interest rate for 5/1 ARMs increased to 3.33% from 3.29%.