Mortgage applications reflected the rise in interest rates and stubbornly tight housing inventory last week.
The Mortgage Bankers Association’s weekly index declined 4% on a seasonally adjusted basis from a week earlier; and was down 2% on an unadjusted basis.
"Rates increased slightly last week, as various job market indicators showed a bounce back in job gains and an acceleration in wage growth in October. The survey's 30-year fixed-rate, at 5.15%, was the highest since April 2010," said Joel Kan, MBA's associate vice president of economic and industry forecasts.
The Purchase Index was down 5% to its lowest level since November 2016. The unadjusted Purchase Index decreased 1% and was 0.2% lower than the same week one year ago.
There was a 3% decline for the Refinance Index and the refinance share of all mortgage applications was down to 39.1% from 39.4% a week prior.
"Application activity decreased over the week for both purchase and refinance applications, with the overall market index down to its lowest level since December 2014,” added Kan. “The purchase index declined to its lowest level since November 2016 but remained only slightly below the same week a year ago. It's evident that housing inventory shortages continue to impact prospective homebuyers this fall."
The FHA share of total applications decreased to 10.1% (from 10.3% a week earlier); the VA share increased to 10.1% (9.8%); and the USDA share of total applications remained unchanged from 0.7% the week prior.
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