Report: U.S. Home Purchase Loan Applications Down

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The number of home purchase loan applications in the U.S. fell 5 percent in the last week, as the market began to feel the impact of the government shutdown.

Overall the number of mortgage applications barely shifted last week as an increase in refinance activity counterbalanced the drop in purchase loans, according to the data released today by the Mortgage Bankers Association.

Mortgage applications, which include refinancing and purchase activity, increased 0.3 percent for the week ending Oct. 11, according to the MBA. 

"Purchase applications for government programs dropped by more than 7 percent over the week to their lowest level since December 2007, and the government share of purchase applications dropped to its lowest level in almost three years," Mike Fratantoni, MBA's vice president of research and economics, said in the release.  "Conventional purchase applications dropped as well, but not to the same extent, falling almost 4 percent for the week."

The home purchase index was 1 percent lower than the same week one year ago, the association reports. The refinance index increased three percent from last week. The refinance share of mortgage activity jumped to 66 percent of total applications from 64 percent the week prior. 

More from the report: 

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.46 percent from 4.42 percent, with points decreasing to 0.31 from  0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.51 percent from 4.45 percent, with points decreasing to 0.15 from 0.21 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.16 percent from 4.15 percent, with points increasing to 0.44 from 0.37 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

• The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.52 percent, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

• The average contract interest rate for 5/1 ARMs remained unchanged at 3.25 percent, with points increasing to 0.32 from 0.29 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.