Mortgage demand declined last week for the third consecutive time as mortgage rates remained around 30 basis points higher than they were a month ago, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
For the week ending October 27, total mortgage applications fell 2.1% compared to the prior week, the survey showed. However, the adjustable-rate mortgage (ARM) share of activity increased to 10.7% from 9.5%, the survey showed.
Higher rates have kept conditions challenging for both prospective homebuyers and homeowners looking to sell, and have continued to suppress refinance activity.
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Higher rates have kept conditions challenging for both prospective homebuyers and homeowners looking to sell, and have continued to suppress refinance activity.
“Mortgage applications declined for the third straight week as mortgage rates remained elevated, with all rates around 30 basis points higher than they were a month ago," said Joel Kan, MBA vice president and deputy chief economist. “The 30-year fixed rate dipped slightly to 7.86 percent but remained close to 23-year highs and has been above the 7-percent level since early August 2023.”
According to a recent Kiplinger report, the average 30-year, fixed-rate loan at present is 7.79%, compared to 7.63% last week and 6.94% last year. The average 15-year, fixed-rate mortgage is 7.03%, compared to 6.92% a week ago and up from 6.23% last year.
Mortgage application highlights
The Market Composite Index, which measures mortgage loan application volume, decreased 2.1% on a seasonally adjusted basis from the prior week, and 3% on an unadjusted basis, MBA said.
The Purchase Index declined declined 1% on a seasonally adjusted basis, compared to the prior week. On an unadjusted basis, the index decreased 2% from the prior week and fell 22% from the same week a year ago.
The Refinance Index, which measures refinancing and prepayment activity, decreased 4% from the prior week and was 12% lower from a year ago. The refinance share of mortgage activity decreased to 31.2% of total applications from 31.4% the previous week.
The FHA share of total applications decreased to 14.7%, from 15.2% in the prior week. The VA share decreased to 10.1%, from 10.5% in the week prior, and the USDA share increased to 0.5% from 0.4% the week prior.
“The impact of higher rates continued to be felt across both purchase and refinance markets,” Kan said. “Purchase applications decreased to their lowest level since 1995 and refinance applications to the lowest level since January 2023."
Kan said that government loan applications had much larger weekly declines than usual, with government purchase applications down 3% and refinances down 9%.
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