As interest rates on home loans climbed to the highest levels in seven years, refinances led weekly mortgage applications lower, and adjustable-rate mortgage share jumped to a 16-month high.
Retail applications for residential loans during the seven days ended Oct. 5 descended a seasonally adjusted 1.7 percent from one week previous based on the Market Composite Index.
The decline compared to the week that concluded on Sept. 28 was even greater when seasonal factors are not considered, with the unadjusted index falling 2 percent.
Index data were derived from the Weekly Mortgage Applications Survey reported Wednesday by the Mortgage Bankers Association. Over three-quarters of all applications are reportedly reflected in the survey.
Applications for refinances moved lower by 3 percent.
Refinance share, meanwhile, thinned to 39.0 percent from 39.4 percent and was slashed from almost half in the same week during 2017.
MBA reported that applications for loans to finance home acquisitions were lower by 1 percent on a seasonally adjusted and unadjusted basis. Without any adjustments, purchase-money applications have increased 2 percent from the week ended Oct. 6, 2017.
FHA share climbed to 10.5 percent from 10.2 percent and was also wider than 10.3 percent the same seven days last year. At a 10th, VA share was no different than a week earlier but more narrow than 10.6 percent a year earlier.
As conventional interest rates ascended to their highest level since 2011, ARM share widened to 7.3 percent — its broadest level since it was 7.5 percent in the week ended June 16, 2017.
Lenders had jumbo interest rates 6 basis points lower than conforming rates. The spread was greater than 3 BPS in the prior report and 5 BPS a year prior.
