Higher rates result in fewer new mortgage loan applications

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Mortgage applications decreased 4.6% from one week earlier because of higher rates for conforming and government loans, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending Oct. 20 found that the refinance index decreased 3% from the previous week. The previous week's results included an adjustment for the Columbus Day holiday.

But even with the drop in refi application volume, its share relative to total activity increased to 49.5% from 48.6% the previous week.

The seasonally adjusted purchase index decreased 6% from one week earlier, while the unadjusted purchase index increased 4% compared with the previous week and was 10% higher than the same week one year ago.

Adjustable-rate loan application activity increased to 6.4% from 6.1%, while the share for Federal Housing Administration-guaranteed loans decreased to 9.8% from 10.4%.

The share of applications for Veterans Affairs-guaranteed loans decreased to 10.1% from 10.5% and the U.S. Department of Agriculture/Rural Development share decreased to 0.7% from 0.8%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased 4 basis points to 4.18%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100), the average contract rate decreased 2 basis points to 4.11%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 4 basis points to 4.04%, while for 15-year fixed-rate mortgages the average increased 3 basis points to 3.48%.

The average contract interest rate for 5/1 ARMs decreased 2 basis points to 3.29%.

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Mortgage applications Refinance Purchase Underwriting Mortgage rates FHA The VA Mortgage Bankers Association