Rising rates reduce refi application share below 50%: MBA
The share of mortgage refinance applications dropped below 50% for the first time since the start of September, as interest rates rose to a six-week high.
The refinance application share decreased to 49% from 50.1% the previous week, according to the Mortgage Bankers Association. The last time there was more refi applications than purchase applications was the week of Sept. 1.
MBA's Weekly Mortgage Applications Survey for the week ending Oct. 6 found total volume decreased 2.1% and the refinance index decreased 4% from the previous week.
The market composite index, a measure of mortgage loan application volume, on an unadjusted basis decreased 2% compared with the previous week.
The seasonally adjusted purchase index decreased 0.1% from one week earlier, while the unadjusted purchase index increased 0.1% compared with the previous week and was 7% higher than the same week one year ago.
Adjustable-rate loan application activity increased to 6.6% from 6%, while the share for Federal Housing Administration-guaranteed loans increased to 10.3% from 10%.
The share of applications for Veterans Affairs-guaranteed loans increased to 10.6% from 10% 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 4.16%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100), the average contract rate increased 2 basis points to 4.11%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 1 basis point to 4%, while for 15-year fixed-rate mortgages the average increased 2 basis points to 3.44%. The average contract interest rate for 5/1 ARMs increased 3 basis points to 3.33%.