US Mortgage Applications Fall for Sixth Consecutive Week

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Friday, October 16, the Market Composite Index—a measure of mortgage loan application volume—decreased 5.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5.0%.

The Refinance Index decreased 2% from the previous week and was 59% lower than the same week one year ago.

The seasonally adjusted Purchase Index decreased 7% from one week earlier. On an unadjusted basis, the Purchase Index decreased 7% compared with the prior week and was 18% lower than the same week one year ago.

In remarks accompanying the release, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Mortgage rates decreased for the first time in over two months, with the 30-year fixed rate dropping to 7.41%. However, lower rates were not enough to boost application activity, as both purchase and refinance applications continued to decline. Purchase applications fell 18% behind last year’s pace, as higher rates are pricing buyers out of the market. The ARM share held steady at 10.5%, as ARM rates remained almost a full percentage point lower than the 30-year fixed rate, giving qualified borrowers a lower rate option to purchase a home.

It is very clear that the higher mortgage rate environment has cooled the housing market this fall.”