Mortgage applications fell for the third week in a row as mortgage rates surged toward 8%.

For the week ending Oct. 27, total home loan applications fell 2.1% compared to the week prior, according to weekly mortgage application data from the Mortgage Bankers Association (MBA).

“The impact of higher rates continued to be felt across both purchase and refinance markets,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.

He noted that purchase applications decreased 2% from the week prior and 22% from the same week a year ago, falling to their lowest level since 1995.

Meanwhile, refinance applications fell 4% from the previous week and 12% from the same time period in 2022, hitting their lowest level since January 2023.

Purchase applications for government-backed loans declined significantly more than conventional loans. Purchase applications for government loans fell by 3% and refi applications for those loans fell by 9% week over week. 

Kan added that “[adjustable-rate mortgage] loans increased almost 10% last week and continued to gain share, growing to 10.7% of all applications.”

The share of Federal Housing Administration (FHA) loan activity was 14.7%, down from 15.2% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 10.1%, down from 10.5% while the share of Department of Agriculture (USDA) loan activity increased from 0.4% to 0.5% week over week.

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