Mortgage application activity trended downward during the week ending Oct. 3, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 4.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5% compared with the previous week.
Both the seasonally adjusted and unadjusted Purchase Index dipped by 1%, with the latter also registering as 14% higher than the same week one year ago. The Refinance Index decreased 8% from the previous week and was 18% higher than the same week one year ago, and the refinance share of mortgage activity decreased to 53.3 % of total applications from 55% the previous week.
Among the federal programs, the FHA share of total applications increased to 18.5% from 16.8% the week prior while the VA share of total applications increased to 16.3% from 16.2% and the USDA share of total applications remained unchanged at 0.4%.
“With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Refinance volume remains somewhat elevated relative to levels of a month ago. Purchase activity declined by about 1% for the week but continues to show moderate growth on an annual basis, and stronger growth for FHA loans, favored by first-time homebuyers. The ARM share increased to 9.5% last week from 8.4% the prior week. Our survey shows 5/1 ARM rates are averaging almost a percentage point below 30-year fixed rates, and this differential is leading more purchase and refinance applicants to consider ARMs.”
