The Mortgage Bankers Association's (MBA's) Market Composite Index, a measure of overall mortgage application volume, ended a four week slide during the week ended October 13.  It didn't last long, moving downward again last week.  Fueled by declining applications for both refinancing and purchase money mortgages, it fell 4.6 percent on a seasonally adjusted basis. The earlier weeks data had been adjusted to account for the Columbus Day holiday, allowing the index to rise 6.0 percent this week on a seasonally adjusted basis.

While the Refinance Index decreased 3 percent from the previous week, the portion of applications that were for refinancing recovered slightly after four straight weeks of decline. Refinancing made up 49.5 percent of the weeks activity, compared to 48.6 percent the previous week.

Refi Index vs 30yr Fixed

The seasonally adjusted Purchase Index was down 6 percent during the week ended October 20, but rose 4 percent on an unadjusted basis. Purchase application volume was 10 percent higher than during the same week in 2016.  

Purchase Index vs 30yr Fixed

All government-backed mortgages lost market share when compared to the prior week.  FHA applications declined from 10.4 percent to 9.8 percent and the VA share ticked down to 10.1 percent from 10.5 percent. The USDA portion of total applications decreased to 0.7 percent from 0.8 percent.

Contract and effective mortgage interest rates were mixed across loan types. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less increased to 4.18 percent from 4.14 percent, with points decreasing to 0.42 from 0.44. The effective rate was higher.   

Jumbo 30-year FRM, loans with balances higher than the conforming limit, had an average rate of 4.11 percent, down from 4.13 percent.  Points decreased to 0.24 from 0.32 and the effective rate declined.    

The rate for 30-year FRM backed by the FHA was down 4 basis points to 4.00 percent, with points increasing to 0.41 from 0.37.  The effective rate was higher than the previous week.  

The rate for 15-year FRM rose week-over-week from 3.45 percent with 0.43 point to 3.48 percent with 0.40 point. The effective rate was up.

The average contract interest rate for 5/1 adjustable rate mortgages ((ARMs) decreased to 3.29 percent from 3.31 percent, but a surge in points from 0.40 to 0.54 pulled the effective rate higher. The ARM share of total activity increased to 6.4 percent of total applications from 6.1 percent.

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.