[1]Mortgage applications decreased just 0.8% from a week earlier, according to data from the Mortgage Bankers Association [2]’s (MBA) Weekly Mortgage Applications Survey [3] for the week ending September 8, including an adjustment for the Labor Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.8% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 12% compared with the previous week.
The Refinance Index decreased 5% from the previous week and was 31% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index decreased 11% compared with the previous week and was 27% lower than the same week one year ago.
“Mortgage applications decreased for the seventh time in eight weeks, reaching the lowest level since 1996. Last week’s decline was driven by a 5% drop in refinance applications, to the weakest reading since January 2023,” said Joel Kan, MBA’s VP and Deputy Chief Economist. “The 30-year fixed mortgage rate increased to 7.27% 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% gain in conventional loans."
The refinance share of mortgage activity decreased to 29.1% of total applications from 30.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.5% of total applications.
The FHA [4] share of total applications increased to 14.2% from 13.7% the week prior. The VA share of total applications remained unchanged at 11.3% from the week prior. The USDA share of total applications decreased to 0.4% from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances—an estimated $726,200 or less—increased to 7.27% from 7.21%, with points increasing to 0.72 from 0.69 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances—roughly greater than $726,200—increased to 7.25% from 7.21%, with points decreasing to 0.72 from 0.76 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 7.04% from 7.03%, with points increasing to 0.98 from 0.95 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 6.72% from 6.66%, with points increasing to 1.01 from 0.86 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 6.59% from 6.33%, with points increasing to 1.16 from 1.11 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
"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," said Kan.
To read the full release, click here [3].