Rates Above 5% Continue to Quell New Loan Applications

For the third straight week, interest rates for the 30-year fixed rate loan being above 5% led to a continued decline in new applications, the Mortgage Bankers Association Weekly Mortgage Applications Survey found. The Market Composite Index, a measure of loan application volume, decreased 12.3% for the week ending Oct. 23 on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2.8% compared with the previous week. An adjustment was made to the Index for the week ending Oct. 16 to take into account Columbus Day. The Refinance Index decreased 16.2% from the previous week and the seasonally adjusted Purchase Index decreased 5.2% from one week earlier. The market share of refinance applications, according to the survey, declined to 62.3% from 65.0% for the previous week. The share of adjustable-rate mortgage applications increased to 6.9% for the week, up from 6.4% one week prior. The average contract interest rate for 30-year fixed-rate mortgages fell to 5.04% from 5.07%, with points increasing from 1.13 to 1.25 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The average contract interest rate for 15-year FRMs increased 2 basis points from the previous week, to 4.53%, while for one-year adjustable rate loans, it declined by 7 BP to 6.79%. The MBA stopped disclosing index values with the July 31 data release.