As the 30-year, fixed-rate mortgage hit 7.67% for the week ending Oct. 6, mortgage applications remained near historic lows. However, an uptick in adjustable-rate mortgage (ARM) applications edged total applications up slightly.
Mortgage applications picked up 0.6% for the week ending Oct. 6, compared to the week prior, according to weekly mortgage application data from the Mortgage Bankers Association (MBA).
“Application activity remains depressed and close to multi-decade lows, with purchase applications still almost 20% behind last year’s pace,” Joel Kan, MBA’s vice president and deputy chief economist, said in a news release.
”Refinance applications also continue to be limited, and the average loan size has fallen to its lowest level since 2017.”
On an unadjusted basis, purchase applications inched up 1% from the week prior and were 19% lower than the same week a year ago.
Meanwhile, refinance applications rose 0.3% week over week and were 9% lower than the same week the prior year.The refinance share of all mortgage applications fell to 31.6% from 31.7% the previous week.
Meanwhile, as homebuyers shop around for lower mortgage payments, the share of ARM applications jumped 15% over the week, Kan noted.
As a result, ARM applications represented 9.2% of all loan applications, the highest share since November 2022. The uptick in ARM volume was mainly driven by a decline in ARM rates even as fixed mortgage rates surged.
The share of Federal Housing Administration (FHA) loan activity inched down to 14.4% from 14.5% for the week ending Oct. 6. The share of Department of Veterans Affairs (VA) loan activity was 10.2%, up from 10.1% the week prior while the share of Department of Agriculture (USDA) loan activity held steady at 0.5%.