The past week saw mortgage applications fall more than 6% compared to the previous seven day span, according to data from a recent Mortgage Bankers Association (MBA) survey.
Applications decreased 6.6% from one week earlier, notes MBA’s latest Weekly Mortgage Applications Survey for the week ending October 24.
Refinances fared slightly worse in the past week, declining 7% while MBA’s Purchase Index only decreased 5% from the prior week. Unadjusted, the Purchase Index was 15% lower than the same week one year ago, however, the seasonally adjusted purchase index and conventional purchase index were the lowest since February.
The average loan size for refinance applications decreased to $263,600 in the most recent week from a survey high of $306,400 recorded the previous week. This decline was driven largely by a 41% drop in refi applications for loans greater than $729,000, which surged almost 130% the week before, said MBA Chief Economist Mike Fratantoni.
“Borrowers with jumbo loans tend to be the most sensitive to changes in rates, and that sensitivity has been clearly apparent in the past few weeks with double and even triple digit percentage changes in refinance application volume for jumbo loans,” Fratantoni said in a written statement.
For government loans, the share of total Federal Housing Administration (FHA) mortgage applications saw an increase last week to 8.9%, up from 8.3% in the week prior. Meanwhile, the VA share of total applications also rose, from 9.6% to 10.7%, while the USDA share increased from 0.8% to 0.9%.
Despite gains, MBA notes that the government purchase index was the lowest it has been since August 2007.
Conducted weekly since 1990, MBA’s survey covers over 75% of all U.S. retail residential mortgage applications, garnering responses from mortgage bankers, commercial banks and thrifts.
Written by Jason Oliva
