Both refinance, and purchase applications continue to fall.
Mortgage applications fell two percentage points week over week, reflecting decreasing demand for home loans as lending rates continue to rise.
Overall mortgage application volume was down 2% on both a seasonally adjusted and unadjusted basis for the week ending October 7, according to the Mortgage Bankers Association’s latest survey. The downtrend in application volume was due to the recent spike in mortgage rates.
“Mortgage rates moved higher once again during the first week of the fourth quarter of 2022, with the 30- year conforming rate reaching 6.81%, the highest level since 2006,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Mortgage rates increased across all product types in MBA’s survey, with the largest, a 20-basis-point increase, for five-year ARM loans. The ARM share of applications remained quite high at 11.7% - just below last week’s level.”
Refinance application volume declined 2% from the week before and was 86% lower than the same week a year ago. Purchase applications also saw a 2% drop and were 39% lower than last year.
The refi share of mortgage activity held steady at 29% of total applications, while the adjustable-rate mortgage share of activity dipped to 11.7%.
“Application volumes for both refinancing and home purchases declined and continue to fall further behind last year’s record levels,” Fratantoni said. “The news that job growth and wage growth continued in September is positive for the housing market, as higher incomes support housing demand. However, it also pushed off the possibility of any near-term pivot from the Federal Reserve on its plans for additional rate hikes.”