The volume of applications for mortgages dropped during the week ending Oct. 5 as average contract interest rates rose to record levels, according to the Weekly Mortgage Applications Survey released by the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, fell 1.7% on a seasonally adjusted basis and slipped 2% on an unadjusted basis.
The Refinance Index declined 3%. The Purchase Index fell 1% on both seasonally adjusted and unadjusted bases. The unadjusted Purchase Index was 2% higher than the same week one year ago.
During the period, the activity share of refinance applications fell to 39% from 39.4%, while the adjustable-rate mortgage (ARM) share increased to 7.3% of total applications.
Applications for FHA loans accounted for 10.5% of the total, up from 10.2% in the previous survey. The VA share of total applications remained unchanged at 10%. USDA applications increased their share to 0.8% from 0.7%.
The average contract interest rate for all mortgage types increased during the period. The 30-year fixed-rate mortgage with conforming loan balances averaged 5.05%, its highest level since February 2011, up from 4.96%, with points increasing to 0.51 from 0.49. The average for the 30-year fixed-rate mortgages with jumbo loan balances increased to its highest level since July 2011, 4.99%, from 4.93%, with points increasing to 0.35 from 0.31.
Rates for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since April 2011, 4.98%, from 4.95%, with points decreasing to 0.63 from 0.80. The average for 15-year fixed-rate mortgages increased to its highest level since April 2010, 4.44%, from 4.39%, with points increasing to 0.58 from 0.50. The 5/1 ARM averaged 4.29%, its highest level since the series began in 2011, up from 4.24%, with points increasing to 0.52 from 0.48.