New applications for residential loans during the most-recent week slowed, with refinancing activity dropping more than purchase financing.
A 6 percent seasonally adjusted retreat from one week earlier was recorded for the Market Composite Index for the week ended Oct. 7.
Even without any seasonal adjustments, the index — a measure of of mortgage loan application volume — declined 6 percent for the week.
The index is derived from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey, which reportedly covers more than three-quarters of all U.S. retail residential loan applications.
MBA reported that applications for refinances moved down 8 percent compared to the week ended Sept. 30 to the slowest pace since June. Refinance share, meanwhile, thinned to 62.4 percent from 63.8 percent a week prior but widened from 61.2 percent a year prior.
The survey indicated that applications for purchase financing
saw a 3 percent decline from the previous week on a seasonally adjusted basis. Foregoing seasonal adjustments, the Purchase Index slipped 2 percent but was up 27 percent from the week ended Oct. 9, 2015.
Applications for mortgages insured by the Federal Housing Administration accounted for 10.9 percent of the latest activity. FHA share widened from 10.0 percent in the last report but was reduced from 12.6 percent in the year-earlier report.
Another 12.0 percent of applications were for loans guaranteed by the Department of Veterans Affairs. VA share was thicker than 11.4 percent the previous week and 11.5 percent a year previous.
Jumbo rates were a basis point less than conforming rates. The jumbo-conforming spread thinned from a negative 2 BPS one week earlier and a negative 10 BPS one year earlier.
At 4.1 percent, the share of applications that were for adjustable-rate mortgages
declined from 4.5 percent in the prior report. ARM share tumbled from 7.5 percent a year prior.
