Mortgage applications declined on a seasonally adjusted basis during the week ended October 21 compared to the week ended October 14.  The results for the earlier week included an adjustment to account for the Columbus Day holiday.

The Mortgage Bankers Association (MBA) said its Market Composite Index was down 4.1 percent during the past week. On a non-seasonally adjusted basis the index rose 7.0 percent.

Applications for refinancing had a 62.7 percent share of the total, up from 61.5 percent but the Refinance Index decreased 2 percent to its lowest level since June 2016. The seasonally adjusted Purchase Index dropped 7 percent to its lowest level since January 2016. The unadjusted Purchase Index was 3 percent higher than a week earlier and 9 percent above the level of the same week in 2015.

The share of applications that were for FHA-backed mortgages was 11.1 percent compared to 11.3 percent the prior week. The VA share decreased to 12.2 percent from 12.8 percent and the USDA share was unchanged at 0.7 percent.

Contract interest rates for all but FHA loans eased slightly although effective rates were mixed.  The average contract rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) decreased to 3.71 percent from 3.73 percent, with points increasing to 0.37 from 0.36.  The effective rate was lower.  

The contract rate for jumbo 30-year (FRM), with loan balances greater than $417,000 dipped 1 basis point to 3.71 percent. Points rose to 0.35 from 0.29 leaving the effective rate unchanged.

Thirty-year FHA rates averaged 3.56 percent with 0.28 point compared to 3.54 percent, with 0.30 point the previous week. The effective rate was also higher.

The average contract interest rate for 15-year FRM decreased to 3.01 percent from 3.03 percent. Points increased to 0.28 from 0.27, but the effective rate was down.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 2.93 percent from 2.97 percent and points dropped to 0.32 from 0.41 bringing the effective rate down as well. The ARM share of mortgage applications increased to 4.2 percent from 4.1 percent.

MBA's Weekly Mortgage Applications Survey covers over 75 percent of all U.S. retail residential mortgage applications.  It has been conducted since 1990 with respondents that 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 mortgages with an 80 percent loan-to-value ratio and points that include the origination fee.