Mortgage application activity was largely flat for the week ending October 8, despite mortgage rates hitting their highest level since June.
This is according to the latest mortgage application survey from the Mortgage Bankers Association, which reported that claims overall were only up 0.2% from the previous week.
“An increase in home purchase requests offset a slight drop in refinancing,” said Joel Kan, vice president of economic and industrial forecasting at the MBA. “The increase in requisitions was good news, but was mainly due to a 2% gain in conventional requisitions, which kept the average loan amount at a high level.
The refinancing index fell 1% from the previous week and was 16% lower than the same week a year ago. The seasonally adjusted purchasing index increased 2% from the previous week; the unadjusted buy index was 10% lower than a year ago.
“The 30-year fixed rate hit 3.18% last week and rose 15 basis points over the past month, leading to an 11% drop in refinancing requests during this period,” Kan noted. “Government refinancing requests fell more than 3% last week, due to lower FHA refinances and an eight basis point increase in the average FHA mortgage rate. We continue to expect refinancing activity to weaken as rates rise and borrowers see fewer incentives. ”
Overall, the share of refi mortgage applications fell to 63.9% from 64.5% the previous week. The activity share of adjustable rate mortgage loans (ARM) remained unchanged at 3.4% of total applications; the share of FHA requests decreased to 10.2% from 10.5% the previous week; and the share of VA in total claims increased from 10.3% to 10.2%.
The average contractual interest rate for 30-year fixed rate mortgages with jumbo loan balances (over $ 548,250) has increased from 3.20% to 3.22%.
Nowadays, many lenders are also bringing back loan products that they put aside during the pandemic, including non-QM jumbo loans.