Residential Real Estate News
Despite Lower Rates, U.S. Mortgage Applications Dip in Late September
New data from the Mortgage Bankers Association's Weekly Applications Survey for the week ending September 27, 2024, shows a 1.3 percent decline in U.S. mortgage applications compared to the previous week.
The Market Composite Index, which measures overall mortgage loan application volume, fell 1.3 percent on a seasonally adjusted basis from the prior week. On an unadjusted basis, the Index dropped by 1 percent. The Refinance Index decreased by 3 percent but was 186 percent higher than the same period last year. The seasonally adjusted Purchase Index increased by 1 percent, while the unadjusted Purchase Index also rose 1 percent and was 9 percent higher than the same week a year ago.
Mike Fratantoni, MBA's Senior Vice President and Chief Economist, commented, "Last week's data revealed continued solid economic growth, despite declining inflation. As a result, mortgage rates saw a modest increase, with the 30-year fixed mortgage rate rising slightly to 6.14 percent." He added, "This increase led to a dip in refinance applications for the week, though they remain nearly three times higher than last year."
Fratantoni also noted that more homebuyers seem to be entering the market, as evidenced by the rise in purchase application activity. "Purchase applications increased for the week and were over 9 percent higher than the same time last year. Inventory of both new and existing homes has been rising throughout 2024, providing buyers with more options and slightly better affordability due to lower mortgage rates."
Refinance activity accounted for 54.9 percent of total applications, down from 55.7 percent the previous week, while adjustable-rate mortgage (ARM) activity fell to 5.8 percent. The FHA share of applications rose to 16.6 percent from 15.0 percent, while the VA share declined to 15.4 percent from 18.3 percent. The USDA share of applications increased slightly to 0.4 percent from 0.3 percent.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) rose to 6.14 percent from 6.13 percent, with points increasing to 0.61 from 0.57 (including origination fees) for 80 percent loan-to-value (LTV) loans. The effective rate also increased.
For 30-year fixed-rate jumbo loans (above $766,550), the average rate increased to 6.50 percent from 6.47 percent, with points decreasing to 0.36 from 0.50. The effective rate remained unchanged.
The average rate for FHA-backed 30-year fixed-rate mortgages rose to 6.06 percent from 5.99 percent, with points dropping to 0.75 from 0.79. The effective rate increased.
For 15-year fixed-rate mortgages, the average rate climbed to 5.51 percent from 5.47 percent, with points rising to 0.62 from 0.52. The effective rate increased.
Lastly, the average rate for 5/1 ARMs rose to 5.87 percent from 5.76 percent, with points increasing to 0.55 from 0.44. The effective rate also increased.
