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Mortgage Applications Plunge 12 Percent as Loan Rates Jump

Mortgage Applications Plunge 12 Percent as Loan Rates Jump
(FLYNT/Dreamstime)

Wednesday, 23 October 2019 01:22 PM

Mortgage applications decreased 11.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending October 18.

The Market Composite Index, a measure of mortgage loan application volume, decreased 11.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 12 percent compared with the previous week.

The Refinance Index decreased 17 percent from the previous week and was 126 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 6 percent higher than the same week one year ago.

"Interest rates continue to be volatile, with Brexit votes and ongoing trade negotiations swinging rates higher or lower on any given day. Last week, mortgage rates jumped 10 basis points and were above 4 percent for the first time since September," said Mike Fratantoni, MBA Senior Vice President and Chief Economist.

"The increase in mortgage rates caused refinance applications to drop 17 percent, and by more than 20 percent for conventional loans. Borrowers with larger loans are the most sensitive to rate changes, and with rates climbing higher last week, the average size of a refinance loan application fell to its lowest level this year."

Added Fratantoni, "Although purchase applications declined, application volume is still running about 6 percent ahead of this time last year. Low mortgage rates continue to fuel buyer interest, but supply and affordability challenges persist."

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.02 percent from 3.92 percent.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.39 percent from 3.32 percent.

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Mortgage applications decreased 11.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending October 18.
mortgage, applications, loan, rates
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2019-22-23
Wednesday, 23 October 2019 01:22 PM
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