Mortgage applications were down last week by the largest seasonally adjusted percentage since September 2017. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, dropped by 7.1 percent during the week ended October 12, and was down 7.0 percent unadjusted. There was a minor holiday, Columbus Day, that shortened the week for some financial institutions, but MBA said its numbers were not adjusted to account for the holiday.

Refinancing also suffered a major loss, declining 9 percent compared to the week ended October 5.  It was the largest dip since the week ended November 24, 2017.  The share of mortgage activity ticked down to 38.1 percent of total applications from 39.0 percent during the week ended October 5.   

The Purchase Index lost 6 percent on both an adjusted and an unadjusted basis.  The unadjusted version continues to hold on to an annual edge; it was 2 percent higher than the same week one year ago.

Refi Index vs 30yr Fixed



Purchase Index vs 30yr Fixed


The share of applications for FHA mortgages ticked down to 10.4 percent from 10.5 percent and the VA share rose to 10.4 percent from 10.0 percent. The USDA share of applications was unchanged at 0.8 percent.

Mortgage interest rates were mixed although several products set new multi-year highs. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $453,100 or less increased to its highest level since February 2011, 5.10 percent with 0.55 point.  The previous week the rate was 5.05 percent, with 0.51 point. The effective rate also increased.

Rates for the Jumbo 30-year FRM were down slightly. The average rate for loans with origination balances higher than the conforming limit was 4.98 percent, 1 basis point lower than the prior week.  Points decreased to 0.34 from 0.35 and the effective rate declined.

The rate for FHA-backed 30-year FRM hit its highest level since April 2011, 4.99 percent, up from 4.98 percent.  Points increased to 0.69 from 0.63 and the effective rate moved higher.

There was a 6 basis point jump in the average contract interest rate for 15-year fixed-rate mortgages, taking them to their highest level since February 2011, 4.50 percent.  Points declined to 0.54 from 0.58 but the effective rate was still higher.  

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) moved to the highest level in the series' seven year history, 4.34 percent, up from 4.29 percent. Points however dropped to 0.35 from 0.52, pulling the effective rate lower.

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.