Mortgage applications see slight decline despite 3% mortgage rate
Mortgage applications held relatively steady last week, falling 0.7% from the week prior, according to a report from the Mortgage Bankers Association.
After hitting their highest level since mid-August the week before, refinances experienced a slight 0.3% dip but remained 44% higher than the same week a year ago. Refinances also continued to inch closer to two-thirds share of mortgage activity as they increased to 65.6% of total applications.
Despite the 30-year fixed mortgage rate declining to 3%, purchases also took a hit last week – falling 2% on a seasonally adjusted basis. However, they remained 24% higher than the same time last year.
“Applications for government mortgages offset some of the overall decline by increasing 3%, driven by a solid gain in government purchase applications and an 11% jump in VA refinance applications,” said Joel Kan, MBA’s vice president of economic and industry forecasting.
Last week, Kan mentioned demand waning in the entry-level portion of the market caused by supply and affordability hurdles – an issue he echoed this week as well.
That issue is further evidenced by an MBA report that showed purchase applications higher than $766,000 jumped anywhere from 49% to 74% between June and September, while the smallest loan tier of $150,000 or less increased no more than 3% in each of those months.
Regardless of price point, housing supply remains a challenge for many aspiring buyers, but activity should continue to stay strong the rest of the year, Kan said.
Here is a more detailed breakdown of this week’s mortgage application data:
The FHA’s share of mortgage apps fell to 10.7% from 11%.The VA share of applications rose to 13.4% from 12.2%.The USDA share of total applications rose to 0.6% from 0.5%.The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) fell to 3% from 3.01%.The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) fell to 3.3% from 3.31%.The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.12% from the week prior.The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 2.59% from the week prior.The average contract interest rate for 5/1 ARMs fell to 2.63% from 2.8%.
The post Mortgage applications see slight decline despite 3% mortgage rate appeared first on HousingWire.