Mortgage application activity dropped to its lowest level since December 2014 as interest rates reached an eight-year high, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 2 had a 4%
The seasonally adjusted purchase Index decreased 5% from one week earlier to the lowest level since November 2016, while the unadjusted purchase index decreased 1% compared with the previous week and was 0.2% lower than the same week one year ago.
"Rates increased slightly last week, as various job market indicators showed a bounce back in job gains and an acceleration in wage growth in October," Joel Kan, the MBA's associate vice president of economic and industry forecasts, said in a press release. "The survey's 30-year fixed-rate, at 5.15%, was the highest since April 2010."
"The purchase index declined to its lowest level since November 2016, but remained only slightly below the same week a year ago. It's evident that housing inventory shortages continue to impact prospective homebuyers this fall," Kan said.
Adjustable-rate loan activity increased to 7.8% from 7.6% of total applications, while the share of Federal Housing Administration-guaranteed loans decreased to 10.1% from 10.3% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 10.1% from 9.8% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.7% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 4 basis points to 5.15%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 3 basis points to 4.97%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 7 basis points to 5.15%. For 15-year fixed-rate mortgages the average remained unchanged at 4.55%.
The average contract interest rate for 5/1 ARMs increased 3 basis points to 4.36%.
