Fewer Mortgage Applications As Demand for Refinance Decreases

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Mortgage applications declined by 6.6% on a seasonally adjusted basis during the week ending October 24th. This is revealed in the Weekly Mortgage Applications Survey compiled by the MBA. This weekly decline came after an increase of 11.6% during the previous week.

On an unadjusted basis, the Market Composite Index, which indicates the volume of applications dropped down by 7%. It experienced a decline after increasing by 12% during the week before.
The applications for mortgage refinance declined by 7% during the week ended October 24th. For comparison, during the week before, they marked a gain of 23%. Despite the decline in refinance applications, they retain their share in the total volume of applications. It is still 65%. The share of adjustable-rate mortgages declined while the shares of all types of government-backed loans increased.

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The applications for home purchase loans decreased by 5% on a seasonally adjusted basis. On a seasonally unadjusted basis, the decrease was the same. The Purchase Index, which indicated the volume of home purchase loan applications, reached a level which is 15% lower than a year ago. This index reached its lowest level since February of this year. The purchase index for conventional mortgage loans also reached its lowest level since the middle of the first quarter of the year. The purchase index for government-backed loans was at its lowest level since the middle of the third quarter of 2007 during the week.

The Chief Economist of MBA, Mike Fratantoni, commented that borrowers who had jumbo loans tended to be more sensitive to mortgage rates and this resulted in large movements in the refinance applications for jumbo loans. During the week ending October 24th, the refinance applications for jumbo loans declined by 41% after having experienced a rise of 130% during the previous week. The average size for mortgage refinance applications dropped to $263,600 from $306,400 during the week before.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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