Mortgage Application Activity Slows Down

Mortgage application activity slowed during the week ending Oct. 4, according to data from the Mortgage Bankers Association (MBA).

The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 5.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index dropped by an even 5%.

The seasonally adjusted Purchase Index dipped by a scant 0.1% from one week earlier while the unadjusted index inched up by an equally scant 0.1% – and the latter was also 8% higher than the same week one year ago. The Refinance Index was down by 9% from the previous week but was 159% higher than the same week one year ago. The refinance share of mortgage activity decreased to 52.4% of total applications from 54.9% the previous week.

Among the federal programs, the FHA share of total applications decreased to 16.2% from 16.6% the week prior while the VA share of total applications increased to 16.9% from 15.4% and the USDA share of total applications remained unchanged at 0.4%.

Mike Fratantoni, MBA’s senior vice president and chief economist, observed, “The largest constraint for many prospective homebuyers over the past year had been the lack of inventory. Now, there are more homes available in many markets across the country, and with mortgage rates still low compared to recent history, at least some potential homebuyers are moving ahead.”