The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning, noting a drop of 4.2% in the group's seasonally adjusted composite index compared with last week's decrease of 1.2%. Unadjusted, the composite index fell by 14%.
Applications for refinancing fell 5% (seasonally adjusted), while seasonally adjusted purchase applications increased by 1% from the previous week. Unadjusted, the purchase index fell 9% compared with the previous week and rose 12% compared with the same week a year ago. This week's results include an adjustment for the Columbus Day holiday.
The refinancing rate fell slightly to 82% of total applications, down 1% from a week ago. About 96% of the applications were seeking fixed-rate loans, consistent with last week's reading.
The average contract interest rate for a conforming 30-year fixed-rate mortgage rose slightly from 3.56% to 3.57%. The rate for a jumbo 30-year fixed-rate mortgage also fell, from 3.74% to 3.81%. The average interest rate for a 15-year fixed-rate mortgage decreased from 2.88% to 2.87%.
The contract interest rate for a 5/1 adjustable rate mortgage fell from 2.60% to 2.59%.
The summer home buying season is winding down and the sharp declines indicate that. Typically, home buying slows during the holiday season, and that is what we are beginning to see here.