US Mortgage Applications Drop 12.7% in the Week Ending September 26

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Friday, September 26, the Market Composite Index—a measure of mortgage loan application volume—declined 12.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13.0%.

The Refinance Index fell 21.0% from the previous week but was 16.0% higher than the same week a year ago.

The seasonally adjusted Purchase Index decreased 1.0% from one week earlier. On an unadjusted basis, the Purchase Index declined 2.0% compared with the prior week but was 16.0% higher than the same week last year.

MBA Vice President and Deputy Chief Economist Joel Kan said:

“Mortgage rates increased to their highest level in three weeks as Treasury yields pushed higher on recent, stronger than expected economic data. After the burst in refinancing activity over the past month, this reversal in mortgage rates led to a sizeable drop in refinance applications, consistent with our view that refinance opportunities this year will be short-lived. With the 30-year fixed rate now at 6.46%, refinance activity declined for all loan types, including a 22% decrease in conventional refinances and 27% decrease in VA refinances. The average loan size for refinances dropped to $380,100 from $461,300 two weeks ago as these higher rates eliminated the refinance incentive for many borrowers with large loans.

Purchase applications were down slightly over the week after three consecutive increases, but the strength of the purchase market has also been impacted by other factors such as broader economic conditions, the health of the job market, and housing inventory.”