After four consecutive weeks of declining momentum, mortgage application activity perked up for the week ending Oct. 24, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased by 7.1% on a seasonally adjusted basis and by 7% on an unadjusted basis from one week earlier. The seasonally adjusted Purchase Index increased 5% while the unadjusted index was up by 4% and was also 20% higher than the same week one year ago. The adjustable-rate mortgage (ARM) share of activity decreased to 8.9% of total applications.
The Refinance Index increased by 9% and was also 111% higher than the same week one year ago. The refinance share of mortgage activity increased to 57.1% of total applications from 55.9% in the previous week.
Among the federal programs, the FHA share of total applications decreased to 20.5% from 21.8% the week prior while the VA share of total applications dipped to 13.4% from 13.5% and the USDA share of total applications inched down to 0.2% from 0.3%.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “The ARM share of applications, which had been trending higher, dipped below 10% last week, as lower rates prompted more borrowers to choose fixed-rate loans. Additionally, the average loan size of a refinance application remained elevated at $393,900, as borrowers with larger loan sizes continue to be sensitive to rate movements. Purchase applications increased compared to a holiday-shortened week across most loan types. However, USDA applications fell more than 26%, impacted by the ongoing government shutdown.”
