After
reaching
their
highest
level

since
July
2022,

mortgage
applications
have
declined
for
two
straight
weeks,
counteracting
some

recent
positive
signs
for
a
still-sputtering
housing
industry.

According
to
weekly
data
released
Wednesday
by
the


Mortgage
Bankers
Association
(MBA),
applications
shrank
5.1%
on
a
seasonally
adjusted
basis
during
the
week
ending
Oct.
4.
This
included
a
9%
weekly
decline
in
refinance
applications
and
a
0.1%
decline
in
purchase
loan
demand.

Compared
to
same
week
in
2023,
however,
purchase
applications
were
up
8%
and
refi
applications
were
up
159%.

“In
the
wake
of
stronger
economic
data
last
week,
including
the

September
jobs
report,

mortgage
rates
moved
higher,
with
the
30-year
fixed
rate
rising
to
6.36
percent
—
the
highest
since
August,”

Mike
Fratantoni,
MBA’s
senior
vice
president
and
chief
economist,
said
in
a
statement.
“Conventional
loan
refinances,
which
tend
to
have
larger
balances
than
government
loans
and
hence
are
more
responsive
for
a
given
change
in
mortgage
rates,
fell
to
a
greater
extent
over
the
week.”

Refis
have
become

more
prevalent
of
late
as
interest
rates
have
dropped
enough
from
the
recent
peaks
to
put
more
borrowers
in
the
money.
But
the
refi
share
of
mortgage
activity
dropped
last
week
by
250
basis
points
(bps)
and
accounted
for
52.4%
of
new
applications.

In
reference
to
the
purchase
market,
Fratantoni
observed
that
a
couple
key
factors
continue
to
play
a
role
in
consumer
demand.

“As
we
have
highlighted
before,
the
decision
to
buy
a
home
is
impacted
by
many
factors,
not
just
the
level
of
mortgage
rates,“
he
said.
“The
largest
constraint
for
many
prospective
homebuyers
over
the
past
year
had
been
the

lack
of
inventory.
Now,
there
are
more
homes
available

in
many
markets
across
the
country,
and
with
mortgage
rates
still
low
compared
to
recent
history,
at
least
some
potential
homebuyers
are
moving
ahead.”

MBA
data
showed
that

government
lending
continues
to
represent
a
steady
share
of
the
mortgage
market.
For
the
week
ending
Oct.
4,


Federal
Housing
Administration
(FHA)
loans
decreased
by
40
bps
and
represented
16.2%
of
all
applications,
while


U.S.
Department
of
Veterans
Affairs
(VA)
loans
rose
by
150
bps
to
account
for
16.9%
of
applications.

The
average
contract
interest
rate
for
30-year
fixed-rate
loans
with
conforming
balances
($766,550
or
less)
jumped
from
6.14%
to
6.36%
during
the
week.
Lender
points,
including
origination
fees,
increased
slightly
to
an
average
of
0.62
for
mortgages
with
80%
loan-to-value
(LTV)
ratios.

Interest
rates
for

jumbo
loans
(balances
of
more
than
$766,550)
moved
12
bps
higher
during
the
week,
averaging
6.64%.
Lender
points
averaged
0.5,
up
14
bps,
on
80%
LTV
loans.

Adjustable-rate
mortgages
(ARMs)
increased
to
5.9%
of
all
applications.

The
MBA’s
survey
covers
more
than
75%
of
all
U.S.
retail
residential
mortgage
applications
across
a
variety
of
independent
mortgage
banks,
commercial
banks
and
thrifts.
Its
weekly
application
index
is
benchmarked
to
100
in
March
1990.

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