Mortgage applications dropped to their lowest levels since last spring during the week ended October 28.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, decreased 1.2 percent on a seasonally unadjusted basis, falling back to May 2015 levels.  On an unadjusted basis the index was down 2 percent.

Although the share of refinancing applications remained the same as during the week ended October 21, 62.7 percent, the Refinance Index lost 2.0 percent.  The seasonally adjusted Purchase Index decreased 0.4 percent from one week earlier and declined 2 percent unadjusted.  The unadjusted Purchase Index was up 9 percent compared to the same week in 2015.

The FHA share of total applications remained the same as the previous week, 11.1 percent, while the VA share increased to 12.4 percent from 12.2 percent.  The USDA was 0.7 percent.  

Both contract and effective rates rose during the week with all fixed rates rising to levels last seen in June. The contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances ($417,000 or less) increased to an average of 3.75 percent from 3.71 percent.  Points decreased to 0.36 from 0.37.

The average contract interest rate for 30-year FRM with jumbo loan balances (greater than $417,000) was 3.74 percent with 0.32 point.  The previous week the rate was 3.71 percent with 0.35 point.

Thirty-year 30-year FRM backed by the FHA had an average rate of 3.59 percent, up from 3.56 percent. Points increased to 0.33 from 0.28. 

The average rate for 15-year FRM rose by 3 basis points to 3.04 percent.  Points increased to 0.36 from 0.28.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) was 2.97 percent compared to 2.93 percent a week earlier.  Points jumped to 0.40 from 0.32. The ARM share of application activity increased to 4.4 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.  Survey respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate data assumes loans with an 80 percent loan-to-value ratio and points that include the origination fee.