Mortgage applications inched 0.6% higher in the week ended Oct. 6 despite mortgage rates reaching levels not seen in decades, the Mortgage Bankers Association said, citing its Weekly Mortgage Applications Survey.
The increase in applications for all types of mortgages was driven by a rise in adjustable-rate mortgage applications after a dip in ARM rates, MBA Vice President and Deputy Chief Economist Joel Kan said in a news release.
Specifically, the average contract interest rate for 5/1 ARMs decreased to 6.33% from 6.49%, while the level of ARM applications increased by 15% week over week, bringing the ARM share of all applications to 9.2%, the highest since November 2022.
The average contract interest rate for conforming 30-year mortgages of $726,200 or less jumped to 7.67% from 7.53% the week before, while the rate for 30-year fixed-rate mortgages backed by the FHA rose to 7.40% from 7.29%.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $726,200 increased to 7.70% from 7.51%, and the average contract interest rate for a 15-year fixed-rate mortgage rose to 6.97% from 6.86%.
“Application activity remains depressed and close to multi-decade lows, with purchase applications still almost 20% behind last year’s pace,” Kan said. “Refinance applications also continue to be limited, and the average loan size has fallen to its lowest level since 2017.”