The Mortgage Bankers Association (MBA) said the volume of mortgage applications dipped slightly during the week ended September 8. MBA said its Market Composite Index, a measure of that volume, decreased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index dropped 12 percent during the week, which was shortened by the Labor Day holiday.
The Refinance Index declined 5 percent week-over-week and was 31 percent lower than the same week in 2022. The refinance share of mortgage activity was 29.1 percent compared to 30.0 percent the previous week.
The seasonally adjusted Purchase Index rose 1 percent but fell 11 percent before adjustment. Activity was 27 percent lower than the same week one year ago.
“Mortgage applications decreased for the seventh time in eight weeks, reaching the lowest level since 1996” according to d Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Last week’s decline driven by a 5 percent drop in refinance applications to the weakest reading since January 2023. The 30-year fixed mortgage rate increased to 7.27 percent last week and was 40 basis points higher than where it was in late July. Purchase applications increased over the week despite the increase in rates, pushed higher by a 2 percent gain in conventional loans. Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to sell and buy a new home at a higher rate.”
Other Highlights from MBA’s Weekly Mortgage Applications Survey
- Loan sizes tracked higher with the overall average rising from $361,700 the previous week to $368,100. Purchase loans averaged $412,900, up from $408,800.
- The FHA share of total applications increased to 14.2 percent from 13.7 percent and the VA share was unchanged at 11.3 percent. The USDA share of total applications dropped back to 0.4 percent from 0.6 percent.
- The 7.27 percent average contract interest rate for conforming 30-year fixed-rate mortgages (FRMs) represented a 6-basis point increase from the prior week. Points increased to 0.72 from 0.69.
- The average contract interest rate for jumbo 30-year FRM rose 4 basis points to 7.25 percent while points dipped to 0.72 from 0.76.
- The rate for 30-year FHA-backed FRM inched up to 7.04 percent from 7.03 percent, with points increasing to 0.98 from 0.95.
- Fifteen-year FRM had an average rate of 6.72 percent with 1.01 points. The prior week it was 6.66 percent with 0.86 point.
- average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) increased to 6.59 percent from 6.33 percent, with points increasing to 1.16 from 1.11.
- The ARM share of activity jumped to 7.5 percent of total applications from 6.7 percent.
