US mortgage applications fall 5.3 percent despite lower borrowing rates
US mortgage applications decreased 5.3 percent in the week ending October 16, despite a decline in borrowing rates. Purchase and refinancing applications both fell in the Mortgage Bankers Association survey. The average rate on conforming thirty-year fixed loans eased to 7.41 percent, while purchase applications remained substantially below their level a year earlier.
Economics & Markets··Morning
Applications decline in the latest weekly survey
US mortgage applications fell 5.3 percent from the previous week in the latest Mortgage Bankers Association survey. Both purchase and refinancing activity declined as borrowing rates eased. The survey measures applications rather than completed home sales.[1], [2]
The figures cover the week ending October 16. Purchase applications decreased 7 percent after seasonal adjustment. Refinancing applications fell 2 percent over the week and were 59 percent below their year-earlier level. Unadjusted purchase applications were 18 percent lower than a year earlier.[1]
Fixed mortgage rates retreat
The average contract rate on conforming thirty-year fixed mortgages declined from 7.50 percent to 7.41 percent. The survey’s balance limit for those loans was 832,750 dollars. Rates on larger jumbo loans eased from 7.49 percent to 7.33 percent. Deputy chief economist Joel Kan said the first rate decline in more than two months had not revived application activity.[1]
Refinancing takes a larger share of applications
Refinancing accounted for 39 percent of applications, up from 37.7 percent. Adjustable-rate mortgages kept a 10.5 percent share. The average rate on loans fixed for five years before adjusting declined from 6.54 percent to 6.46 percent. Kan described those products as a lower-rate option for qualified borrowers, while noting the continuing weakness in purchase activity.[1]
