Mortgage applications lower but 30-year loans held steady

There was a decrease of 2.5% (seasonally adjusted) in mortgage applications for the week ending October 26 compared to a week earlier.

The Mortgage Bankers Association’s Market Composite Index was down 3% on an unadjusted basis. The Refinance Index decreased 4% while the Purchase Index decreased 2% both seasonally adjusted and unadjusted compared to the previous week and was down 0.4% from the same week one year ago.

"The 30-year fixed-rate mortgage held steady over the week, but total applications decreased overall. Purchase applications inched backward from the previous week, as well as compared to one year ago - the first year-over-year decline in purchase activity since August," said Joel Kan, AVP of economic and industry forecasts.

Kan added that purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility seen the past couple of weeks.

“Additionally, the ARM share of applications increased to its highest level since 2017, but since this is a compositional measure, it was driven by a greater decrease in applications for fixed-term loans relative to the decrease in ARM applications," he said.

The refinance share of mortgage activity decreased to 39.4 percent of total applications from 39.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.6 percent of total applications, the highest level since May 2017.

The FHA share of total applications increased to 10.3% (10.1% in the previous week); the VA share decreased to 9.8% (10.1%); and the USDA share remained unchanged at 0.7%.

Average contract interest rates
Based on 80% LTV loans the average contract interest rates were: