Mortgage applications fall 5.2% after rates rise again

Mortgage applications slumped 5.2% from one week earlier, according to data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Nov. 14.

On an unadjusted basis, the index decreased 7% compared with the previous week.

The refinance index decreased 7% from the previous week but was 125% higher than the same week one year ago. The refinance share of mortgage activity decreased slightly to 55.4% of total applications, down from 55.6% the previous week.

“Mortgage rates increased for the third consecutive week, with the 30-year fixed rate inching higher to its highest level in four weeks at 6.37%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Application activity over the week was lower, with potential homebuyers moving to the sidelines again, although there was a small increase in FHA purchase applications.

“Refinance applications decreased as borrowers remain sensitive to even small increases in rates at this level. The overall average loan size across both purchase and refinance applications dipped to its lowest level since August of this year, driven by another drop in the ARM share.”

The seasonally adjusted purchase index decreased by 2% from the previous week. The unadjusted purchase index decreased 7% compared with the previous week and was 26% higher than the same week one year ago.

While the adjustable-rate mortgage (ARM) share of activity saw a decrease to 7.5% of all applications, other products saw increases. The Federal Housing Administration (FHA) share of applications increased to 19.9%, up from 19.4% the week prior. The U.S. Department of Veterans Affairs (VA) share increased by 60 basis points to 15.2% while the U.S. Department of Agriculture (USDA) share rose 10 bps to 0.3%.

Interest rates were a mixed bag across the board. While rates for 30-year fixed mortgages increased, rates for 30-year fixed loans with jumbo balances decreased by 7 bps to 6.39%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 6.14% while the rate for 15-year fixed mortgages increased 13 bps to 5.83%. Rates for 5/1 ARMs increased 15 bps to 5.65%.