United States mortgage application activity maintained its downward slide last week, with data from the Mortgage Bankers Association (MBA) showing that both purchase and refinance demand are declining.
The MBA’s Weekly Mortgage Applications Survey for the week ending 3 October revealed a 4.7% drop in the Market Composite Index, which tracks overall mortgage loan application volume.
This marks a 5% decrease from the previous week on an unadjusted basis.
Refinance activity led the overall decline in mortgage demand, with an 8% week-over-week drop, even though it remained 18% higher than the same time last year.
The seasonally unadjusted Purchase Index decreased by 1% from a week earlier and increased 14% year-over-year.
While activity has dropped from last week, MBA’s SVP and chief economist Mike Fratantoni said it has elevated from a month ago and is rising annually.
“With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications,” he said.
“Purchase activity declined by about 1% for the week but continues to show moderate growth on an annual basis, and stronger growth for FHA loans, favoured by first-time homebuyers."
The refinance share of mortgage activity declined to 53.3% of total applications from 55% while the FHA share of total applications increased to 18.5% from 16.8% a week prior.
The average 30-year fixed-rate mortgages with conforming balances (US$806,500 or less) fell from 6.46% to 6.43%. Those with jumbo loan balances (US$806,500 or higher) increased to 6.60% from 6.54%.
