Financial News: U.S. Mortgage Applications Decline - MBA

U.S. Mortgage Applications Decline - MBA

(RTTNews) - U.S. mortgage applications decreased in the week ended September 26 after rising in the previous three weeks, latest survey data from the Mortgage Bankers Association showed on Wednesday.

The market composite index, which measures the house purchase mortgage loan application volume, fell a seasonally adjusted 12.7 percent from the previous week, when it <a href=https://www.rttnews.com/3576801/u-s-mortgage-applications-growth-slows.aspx target=_blank >rose 0.6 percent</a>.

The refinance index slumped 21 percent and the purchase index dropped 1 percent, the MBA survey showed.

The refinance share of mortgage activity decreased to 55.0 percent of total applications from 60.2 percent in the previous week.

The 30-year fixed mortgage rate climbed to 6.46 percent from 6.34 percent, which was the lowest level since September 2024.

"Mortgage rates increased to their highest level in three weeks as Treasury yields pushed higher on recent, stronger than expected economic data," MBA's Vice President and Deputy Chief Economist Joel Kan said.

"After the burst in refinancing activity over the past month, this reversal in mortgage rates led to a sizeable drop in refinance applications, consistent with our view that refinance opportunities this year will be short-lived," the economist added.

The 30-year fixed rate is now at 6.46 percent, leading to decline in refinance activity for all loan types, including a 22 percent decrease in conventional refinances and 27 percent decrease in VA refinances, Kan pointed out. "The average loan size for refinances dropped to $380,100 from $461,300 two weeks ago as these higher rates eliminated the refinance incentive for many borrowers with large loans," Kan said.

Further, the strength of the purchase market has also been impacted by other factors such as broader economic conditions, the health of the job market, and housing inventory, the MBA economist added.

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