The interest rate on a conventional 30-year fixed mortgage hit its highest level since 2001, as the U.S. housing market continued to be buffeted by numerous macroeconomic factors, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Oct 21.
Homebuyer mortgage applications declined 1.7% on a seasonally adjusted basis from the previous week, the MBA said, citing its Market Composite Index, while the association’s Refinance Index rose 0.1% week over week but was down 86% year over year.
“The ongoing trend of rising mortgage rates continues to depress mortgage application activity, which remained at its slowest pace since 1997,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release. “Refinance applications were essentially unchanged, but purchase applications declined 2% to the slowest pace since 2015 — over 40% behind last year’s pace. Despite higher rates and lower overall application activity, there was a slight increase in [Federal Housing Administration] purchase applications, as FHA rates remained lower than conventional loan rates.”
The average contract interest rate for conforming 30-year mortgages of $647,200 or less rose to 7.16% from 6.94%, while the rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.79% from 6.63%.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $647,200 rose to 6.53% from 6.31%, and the average contract interest rate for a 15-year fixed-rate mortgage increased to 6.39% from 6.09%.
The refinance share of mortgage activity decreased to 28.8% of total applications from 28.3% the previous week.
The FHA share of total applications rose to 13.9% from 13.6%, while the VA share of total applications was flat 10.7%, and the USDA share of applications was also flat at 0.5%.