Mortgage applications decreased again last week while demand for adjustable-rate mortgages surged as interest rates remained at elevated levels.
Mortgage applications decreased 1% in the week ended Oct. 20, from the
week earlier, according to data from the Mortgage Bankers Association. The drop in applications came as mortgage rates hit highs not seen since 2000 earlier this month.
“Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995,” the MBA’s deputy chief economist, Joel Kan, said in a press release. “These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity.”
Higher rates are also pushing more people to apply for adjustable-rate mortgages, or home loans with an interest rate that adjusts based on the market.
According to the MBA, the adjustable-rate mortgage share of activity increased to 9.5% of total applications—its highest since November 2022.
“Ten-year Treasury yields climbed higher last week, as global investors remained concerned about the prospect for higher-for-longer rates and burgeoning fiscal deficits. Mortgage rates followed Treasuries higher,” Kan said.
The average contract interest rate for 30-year, fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.9% percent from 7.7%, the association said.
Write to Angela Palumbo at [email protected]
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