Mortgage applications dipped earlier this month as rates have been on the rise following a strong September jobs report.
Recent data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey showed mortgage applications saw a 5.1 percent drop in the first week of October.
“In the wake of stronger economic data last week, including the September jobs report, mortgage rates moved higher, with the 30-year fixed rate rising to 6.36 percent — the highest since August,” said Mike Fratantoni, senior vice president and chief economist at MBA, said in a statement Wednesday.
“Conventional loan refinances, which tend to have larger balances than government loans and hence are more responsive for a given change in mortgage rates, fell to a greater extent over the week. Purchase application volume was little changed over the week and was 8 percent above last year’s level.”
At the same time, MBA’s Refinance Index, which gauges mortgage refinancing activity, fell 9 percent during the same period and was “159 percent higher than the same week one year ago,” the association said.
The latest data also showed the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, which clock in at $766,550 or less, rose to 6.36 percent. The rate for 30-year fixed-rate mortgages with the MBA described as “jumbo loan balances,” or higher than $766,550, reached 6.64 percent from 6.50 percent.
“As we have highlighted before, the decision to buy a home is impacted by many factors, not just the level of mortgage rates. The largest constraint for many prospective homebuyers over the past year had been the lack of inventory,” Fratantoni said.
“Now, there are more homes available in many markets across the country, and with mortgage rates still low compared to recent history, at least some potential homebuyers are moving ahead.”
The data comes days after mortgage rates rose to 6.12 percent in the first jump for 30-year mortgages in almost two months.