Mortgage applications fell 2.5% for the week ending October 26, 2018, according to new data from the Mortgage Bankers Association's weekly Mortgage Applications Survey.

“The 30-year fixed-rate mortgage held steady over the week, but total applications decreased overall. Purchase applications inched backward from the previous week, as well as compared to one year ago – the first year-over-year decline in purchase activity since August,” MBA AVP of Economic and Industry Forecasts Joel Kan said.

On an unadjusted basis, the Mortgage Composite index retreated 3% from the previous week.

The Refinance Index decreased 4% from the previous week, the unadjusted Purchase Index declined 2% from last week and was 0.4% below the same week in 2017, and the seasonally adjusted Purchase Index inched backwards, sliding 2% from one week prior.

“Purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks,” Kan continued. “Additionally, the ARM share of applications increased to its highest level since 2017, but since this is a compositional measure, it was driven by a greater decrease in applications for fixed-term loans relative to the decrease in ARM applications.”

The refinance share of mortgage activity dropped to 39.4% of total applications, down from 39.8% the week before. The adjustable-rate mortgage share of activity moved to 7.6% of total applications, which is the highest level since May of last year.

The Federal Housing Administration share of mortgage apps rose from last week’s 10.1% to 10.3%, and the Veterans Affairs' share of applications decreased to 9.8% from 10.1% last week.

The Department of Agriculture share of total applications held steady at 0.7% from the week before.

The MBA reported that mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) didn’t move an inch from 5.11% the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) fell from 5.01% last week to 4.94% this week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA inched forward from 5.07% last week to 5.08% this week.

The average contract interest rate for 15-year fixed-rate mortgages moderately increased, moving from 4.5% last week to 4.55% this week.

The average contract interest rate for 5/1 ARMs fell, reaching 4.33%, down from 4.47% last week.