The Mortgage Bankers Association (MBA) said mortgage applications were down during the week ended October 6, falling 2.1 percent from the previous week on a seasonally adjusted basis and 2 percent unadjusted.  The downturn in MBA's Market Composite Index, which measures application volume, was primarily due to fewer applications for refinancing.

The Refinancing Index was 4 percent below its level during the week ended September 29.  The share of applications for refinancing constituted less than half of applications received for the first time since late August declining from 50.1 percent to 49.0 percent.

The seasonally adjusted Purchase Index dipped 0.1 percent, but managed a 0.1 percent gain on an unadjusted basis. Purchase volume was 7 percent higher than during the same week last year.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

Applications for FHA loans made up 10.3 percent of total activity, up from 10.0 percent the prior week and the VA share increased to 10.6 percent from 10.0 percent.  The USDA share decreased to 0.7 percent from 0.8 percent.  

Interest rates moved slightly higher last week on both a contract and an effective basis. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less rose to 4.16 percent from 4.12 percent. Points dipped to 0.44 from 0.45.  The jumbo version of the 30-year FRM, loans with balances higher than the conforming rate, increased to 4.11 percent with 0.31 point from 4.09 percent with 0.26 point.

The average contract interest rate for 30-year FRM backed by the FHA increased one basis point to 4.00 percent.  Points averaged 0.36 compared to 0.37 the prior week.   

Fifteen-year FRM had an average contract rate of 3.44 percent with 0.36 point.  The previous week the rate was 3.42 percent with 0.39 point.

The share of adjustable rate mortgage applications (ARMs) increased to 6.6 percent of the total, up from 6.0 percent the week before. The average contract interest rate for 5/1 ARMs increased to 3.33 percent from 3.30 percent, with points remaining unchanged at 0.43.

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.