Mortgage Applications Fall Despite First Rate Dip in Two Months
Mortgage application volume dropped 5.3% last week as buyers remained deterred by high interest rates despite a slight decrease in 30-year fixed-rate mortgages.
Total mortgage application volume fell 5.3% last week, according to the Mortgage Bankers Association, which reported the first decrease in average contract interest rates for 30-year fixed-rate mortgages in over two months. The average rate declined to 7.41% from 7.50%.
Despite the lower rates, purchase applications dropped 7% for the week and 18% year-over-year, while refinance applications decreased 2%. The National Association of Realtors reported a sharp drop in pending home sales for September, suggesting that buyers are reacting to the overall high level of interest rates rather than minor weekly fluctuations.
To secure lower initial rates, 10.5% of borrowers continue to opt for adjustable-rate mortgages. The Mortgage Bankers Association noted that the rate decrease was not sufficient to boost application activity.
