Mortgage demand drops another 6.7%
Stubbornly high interest rates have hampered demand for mortgages, but they are in any case better than a year ago. Mortgage applications fell 6.7% from a week earlier, according to data from the Association of Mortgage Bankers‘s (MBA) weekly employment survey for the week ending October 18.
The Market Composite Index, a measure of the number of mortgage applications, fell by 7% unadjusted. The refinancing index was down 8% from the week before and was still 90% higher than the same week a year ago (when rates were hovering around 8%). The seasonally adjusted purchasing index fell by 5% compared to a week earlier. The unadjusted purchase index was 3% higher than the same week a year ago.
“Mortgage rates showed mixed results last week, but the 30-year fixed rate remained unchanged at 6.52%. Application activity fell to the lowest level since July as both purchase and refinancing applications fell,” said Joel Kan, MBA’s vice president and deputy chief economist.
Kan added: “Purchase requests remained stronger than last year for the fifth week in a row. Although interest rates have risen recently, they are more than a full percentage point lower than a year ago, which has kept some homebuyers in the market. For-sale inventory has begun to loosen and home price growth has slowed in some markets, which combined with these lower rates have created more options for buyers.”
Refinancings comprise 45.7% of applications, up from 46.5% a week earlier.
Higher interest rates are keeping the home sales market subdued, with limited year-over-year gains from last year’s moribund market.
