Activity remained elevated year-over-year despite weekly dip
United States mortgage application activity slipped for the week ending October 31, with the Mortgage Bankers Association (MBA) reporting a 1.9% decrease in its Market Composite Index on a seasonally adjusted basis.
The unadjusted index dropped 3% week over week, reflecting ongoing volatility as the market digested recent Federal Reserve signals and shifting Treasury yields.
The MBA’s latest Weekly Mortgage Applications Survey found that refinance activity also declined, down 3% from the previous week. However, the Refinance Index was still a striking 151% higher than the same period last year. That's a sign that some borrowers continued to seize opportunities as rates hovered near their lowest levels in over a year.
“Despite a decline last week, refinance applications are still significantly higher than a year ago,” Joel Kan, MBA’s vice president and deputy chief economist, said.
“The average loan size for refinance applications was at its highest level in six weeks, as borrowers with larger loans continued to seek ways to lower their monthly payments.”
Purchase activity softened as well, with the seasonally adjusted Purchase Index down 1% from the prior week. The unadjusted Purchase Index fell 2% but remained 26% above last year’s level.
Kan noted, “Purchase applications declined slightly from a week ago, however, there was slight increase in FHA purchase applications as prospective homebuyers continue to seek loan options to help manage challenging affordability conditions.”
Rates for 30-year fixed mortgages with conforming balances ($806,500 or less) edged up to 6.31% from 6.30%, while jumbo loans saw a sharper increase to 6.43%.
FHA-backed 30-year rates ticked up to 6.13%. Adjustable-rate mortgage (ARM) activity also waned, with its share dropping to 8.7% of total applications.
Refinance share accounted for 57% of all applications, a marginal decrease from the previous week. Meanwhile, the FHA share of total applications slipped to 18.5%, while VA and USDA shares rose to 14.9% and 0.3%, respectively.
The latest figures come as the industry continues to grapple with affordability challenges, persistent inflation, and uncertainty over the Fed’s next moves. While rates have stabilized from their 2023 peaks, affordability remains a hurdle for many buyers.
While mortgage applications retreated last week, the year-over-year surge in refinance activity and the resilience of purchase demand underscore the market’s adaptability. As rates fluctuate and affordability pressures persist, lenders and borrowers alike continue to adjust strategies in a dynamic landscape.
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