Weekly Mortgage Applications Slide 6% As 30-Year Home Loan Rates Break Above 7.5%

Mortgage applications fell 6% from the previous week, according to data issued by the Mortgage Bankers Association's (MBA) in its Weekly Mortgage Applications Survey for the week ending September 29.

On a seasonally adjusted basis, the Market Composite Index, which reflects mortgage loan application volume, fell by 6.0%. Without adjustments, it decreased by 6%.

The Refinance Index sank 7% and was 11% below its level from the same week last year. The seasonally adjusted Purchase Index and the unadjusted Purchase Index both fell 6%, with the latter 22% below the year-ago level.

“Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields," said Joel Kan, MBA's Vice President and Deputy Chief Economist. "Rates for all mortgage products increased, with the 30-year fixed mortgage rate increasing for the fourth consecutive week to 7.53 percent – the highest rate since 2000.”

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The average 30-year fixed-rate mortgage with conforming loan balances was at 7.53% — up from 6.75% in the same week last year.

The Deputy Chief Economist noted that mortgage applications dropped to levels not seen since 1996, pointing to surging rates having a discouraging effect on potential homebuyers. There was also a dip in the purchase market, with its activity hitting lows from 1995.

A shift in behavior is underway as refinancing applications slipped 7% weekly and were 11% lower year-over-year. Current refinances account for under a third of all mortgage applications, contrasting from two years ago when they were roughly 75%.

Purchase mortgage applications followed suit, dropping 6% weekly and 22% year-on-year.

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