WASHINGTON—Mortgage applications decreased 1.3% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending Sept. 27.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1% compared with the previous week. The Refinance Index decreased 3% from the previous week and was 186% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index increased 1% compared with the previous week and was 9% higher than the same week one year ago, the MBA said.
“Last week’s incoming data showed an economy that is still growing at a solid pace, even as inflation continues to decline. As a result, mortgage rates were up modestly, with the 30-year fixed mortgage rate increasing slightly to 6.14%,” said Mike Fratantoni, MBA’s SVP and chief economist. "With this move, refinance application volume declined on the week but remains almost three-times as high as last year’s pace.
More Homebuyers Entering Market
“The news for the week was that more homebuyers appear to be entering the market,” continued Fratantoni. “Purchase application activity was up for the week and increased more than 9% compared to last year at this time. Inventories of both new and existing homes have been increasing over the course of 2024, meaning that potential buyers have properties to look at and now have somewhat lower mortgage rates leading to better affordability.”
The refinance share of mortgage activity decreased to 54.9% of total applications from 55.7% the previous week. The adjustable-rate mortgage share of activity decreased to 5.8% of total applications.
The FHA share of total applications increased to 16.6% from 15.0% the week prior. The VA share of total applications decreased to 15.4% from 18.3% the week prior. The USDA share of total applications increased to 0.4% from 0.3% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.14% from 6.13%, with points increasing to 0.61 from 0.57 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week, the MBA said.