Weekly survey reveals a challenging climate for potential homebuyers
Mortgage application activity continued to stall for the week ending October 20, with applications decelerating to their slowest pace in 28 years, the Mortgage Bankers Association said today.
MBA reported a one-percentage-point decrease in overall applications from the previous week. The drop was reflected in the purchase index, which fell 2% week over week and 22% year over year. In contrast, the refinance index saw a 2% increase from the preceding week, though it was still 8% lower than the same week a year ago.
MBA deputy chief economist Joel Kan commented on the trends, noting the 20-basis point weekly increase in the average contract interest for the 30-year fixed-rate home loan.
“Ten-year Treasury yields climbed higher last week, as global investors remained concerned about the prospect for higher-for-longer rates and burgeoning fiscal deficits,” Kan said. “Mortgage rates followed Treasuries higher, with the 30-year fixed mortgage rate jumping 20 basis points to 7.9% – the highest since 2000. Rates have now risen seven consecutive weeks at a cumulative amount of 69 basis points.”
The data also revealed changes in the composition of mortgage activity. The refinance share of mortgage activity increased to 31.4% of total applications, up from 30.5% the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 9.5% of total applications.
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“These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity. The ARM share of applications inched up to 9.5%, its highest since November 2022.”
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