After a brief bump last week thanks to ARM rates decreasing, home purchase applications decreased 6.9% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending October 13, 2023.
This week’s numbers
- The Market Composite Index, a measure of mortgage loan application volume, decreased 6.9% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 7% compared with the previous week.
- The Refinance Index decreased 10% from the previous week and was 12% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 6% from one week earlier.
- The unadjusted Purchase Index decreased 5% compared with the previous week and was 21% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 30.5% of total applications from 31.6% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 9.3% of total applications.
- The FHA share of total applications increased to 14.8% from 14.4% the week prior.
- The VA share of total applications increased to 10.7% from 10.2% the week prior.
- The USDA share of total applications remained unchanged at 0.5% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.70% from 7.67%, with points decreasing to 0.71 from 0.75 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 7.56% from 7.70%, with points increasing to 0.85 from 0.57 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 7.36% from 7.40%, with points decreasing to 1.02 from 1.08 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.98% from 6.97%, with points decreasing to 1.04 from 1.18 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 6.52% from 6.33%, with points increasing to 1.50 from 0.90 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take
“Applications decreased to their lowest level since 1995, as the 30-year fixed mortgage rate increased for the sixth consecutive week to 7.70%–the highest level since November 2000,” said Joel Kan, MBA’s vice president and deputy chief economist. “Both purchase and refinance applications declined, driven by larger drops for conventional applications. Purchase applications were 21% lower than the same week last year, as homebuying activity continues to pull back given reduced purchasing power from higher rates and the ongoing lack of available inventory. The ARM share was 9.3%, the highest share in 11 months, as some borrowers look for alternative ways to lower their monthly payments. Refinance activity was at its lowest level since early 2023. There is very limited refinance incentive with mortgage rates at multi-decade highs.”
