The week ended October 27 saw yet another decline in mortgage applications, making it the sixth week out of the last seven that the Mortgage Bankers Association (MBA) Market Composite Index has fallen.  The index, a measure of application volume, was down 2.6 percent on a seasonally adjusted basis during the week ended October 27.  On an unadjusted basis the Index decreased 3 percent when compared to the previous week.  

As has been the recent case, the decrease was distributed across both purchase mortgages and refinances. The Refinance Index was down 5 percent from the week ended October 20 and has also posted only a single increase in the last seven weeks. The Purchase Index dipped 1 percent seasonally adjusted and 2 percent unadjusted. The unadjusted Purchase Index was 10 percent higher than the same week in 2016.

Applications for refinancing made up 48.7 percent of the total activity, down from 49.5 percent the prior week. The distribution of applications among loan types shifted slightly with the FHA share increasing from 9.8 percent to 10.4 percent and the VA share dipping to 9.9 percent from 10.1 percent. The USDA share of total applications inched up to 0.8 percent from 0.7 percent the prior week.

Interest rates continued to creep upward.  Both contract and effective rates were higher than at the end of the prior week.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less finished the week at 4.22 percent with 0.43 point, the highest rate since last July. The previous week the rate was 4.18 percent with 0.42 point.

The jumbo version of the 30-year FRM, loans with balances greater than $424,100, also had the highest interest rate since July, 4.16 percent compared to 4.11 percent the previous week.  Points increased to 0.27 from 0.24.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA were also back to July levels; the average was 4.07 percent, up 3 basis points from the prior week.  Points rose to 0.46 from 0.41.

Fifteen-year FRM had an average rate of 3.52 percent, increasing from 3.46 percent. That rate was the highest since March 2017.  Points increased to 0.44 from 0.40.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to 3.33 percent from 3.29 percent and points decreased to 0.50 from 0.54. The ARM share of applications increased to 6.8 percent from 6.4 percent the previous week.

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.