Application volume drops for the third week in a row
Mortgage application volume fell for the third straight week as interest rates continued to rise, with both refinance and purchase applications posting decreases for the week ending October 27.
The Market Composite Index, a measure of mortgage loan applications, dropped 2.1% on a seasonally adjusted basis week over week, according to the Mortgage Bankers Association’s latest report. On an unadjusted basis, the index was down 3% compared to the prior week.
“The 30-year fixed rate dipped slightly to 7.86% but remained close to 23-year highs and has been above the 7% level since early August 2023,” said MBA chief economist Joel Kan, noting the higher rates on the purchase and refinance markets.
MBA’s refinance index declined 4% from the previous week, while the purchase index slipped 1% from a week earlier.
Read next: Fed announces latest rate decision
“Purchase applications decreased to their lowest level since 1995, and refinance applications to the lowest level since January 2023. Applications for government loans saw much larger weekly declines than conventional, with government purchase applications down 3% and refinances down 9%.”
In response to the ongoing affordability challenges created by higher rates, there was a notable shift towards adjustable-rate mortgages (ARMs). According to Kan, ARM loans increased by almost 10% and continued to gain market share, reaching 10.7% of all applications.
Simultaneously, the adjustable-rate mortgage (ARM) share of activity increased to 10.7% of total applications. The refinance share of mortgage activity decreased slightly from 31.4% the previous week to 31.2%.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
