The index decreased 11% on an unadjusted basis compared with the previous week.
The refinance index decreased 20% from the previous week, but was still 43% higher than the same week one year ago. The refinance share of mortgage activity decreased to 37.3% of total applications from 41.3% the previous week.
Joel Kan, MBA’s vice president and deputy chief economist, attributed the decline to the second straight week of climbing rates, as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6.90% from last week’s 6.81%.
“These higher rates drove a 20% drop in refinance applications, especially for higher balance loans, with the average loan size falling substantially. The refinance share of applications at 37.3% was the lowest since January,” he said.
The seasonally adjusted purchase index decreased 7% from one week earlier. The unadjusted purchase index decreased 6% compared with the previous week and was 6% higher than the same week one year ago.
“Overall mortgage application activity declined last week, as rates increased to their highest level in two months. The 30-year fixed rate rose for the second straight week to 6.9%, an almost 30-basis-point increase over two weeks,” said Kan. “Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers as we saw a 7% decline in purchase applications. Both conventional and government purchase activity fell relative to the week before, but the overall level of purchase applications was still 6% higher than a year ago.”
The adjustable-rate mortgage (ARM) share of activity, which reached its highest level recorded since November 2023 last week at 9.6%, decreased to 7.5% of total applications.
By product, the FHA share of total applications increased to 16.7% from 15.8% the week prior. The VA and USDA shares of total applications both declined, decreasing to 13.4% from 13.7% and to 0.4% from 0.5% the week prior, respectively.
All mortgage types saw rate increases except for 5/1 ARMs, which decreased to 6.01% from 6.11%.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances increased to 6.90% from 6.84%% while the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.56% from 6.52%. The average contract interest rate for 15-year fixed-rate mortgages increased to 6.20% from 6.11%.