Mortgage Applications Fall For 1st Time Since August

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Mortgage applications decreased 3.3% from one week earlier, the first decrease since late summer, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Oct. 29, 2021.

The MBA’s Market Composite Index — a measure of mortgage loan application volume — decreased 3.3% on a seasonally adjusted basis from a week earlier. On an unadjusted basis, the Index decreased 4% compared to the previous week.

The Refinance Index also decreased 4% from a week earlier, and was 33% lower than in the same week last year. The seasonally adjusted Purchase Index decreased 2% from a week earlier. The unadjusted Purchase Index decreased 3% vs. the previous week and was down 9% from the same week last year.

“Mortgage rates decreased for the first time since August, as concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth, and rising inflation pushed Treasury yields lower,” said Joel Kan, MBA’s associate vice president of economic & industry forecasting. “Most of the decline in rates came later in the week, which is likely why refinance applications declined to the lowest level since January 2020, and the overall share of activity fell to the lowest since July 2021.”

Kan noted that government refinance applications fell for the sixth straight week, “as it becomes evident that an increasing number of borrowers have already refinanced,” he said.

“Purchase activity continues to be held back by high prices and low for-sale inventory, but current applications levels still point to healthy housing demand,” he added. “MBA is forecasting for a record $1.6 billion in purchase mortgage originations this year, and sustained demand leading to another record year in 2022.”    

The refinance share of mortgage activity decreased to 61.9% of total applications from 62.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.2% of total applications. 

The FHA share of total applications decreased to 9.2% from 10.4% the week prior. The VA share of total applications decreased to 9.9% from 10.6% the previous week. The USDA share of total applications remained unchanged at 0.5%.