Mortgage Applications Dip Again as Interest Rates Rise

Mortgage applications dropped for the second consecutive week as higher interest rates led to fewer refinancings.

The Mortgage Bankers Association's market composite index decreased 2.6% on a seasonally adjusted basis for the period ending Oct. 31. During the previous week, mortgage loan application volume was down 6.6%.

The refinancing gauge fell 6% week over week and the purchase index increased 3%, the Washington-based trade group said. The share of applicants seeking to refinance was down two percentage points, to 63%.

Furthermore, the adjustable-rate mortgage share of activity accounted for 7.4% of total applications, while the Federal Housing Administration share represented 9.5%, Veterans Affairs was 10.7% and the USDA share consisted of 0.9%.

The average contract interest rate for a 30-year fixed-rate mortgage increased four basis points compared to a week earlier, to 4.17%. Meanwhile, the average 15-year fixed-rate mortgage was up 10 basis points, to 3.38%. Both the average 30-year fixed rate for jumbo loans and FHA-backed mortgages remained unchanged from the week before, at 4.13% and 3.84%, respectively.

The MBA's weekly survey covers over 75% of all U.S. retail residential mortgage applications.

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