Mortgage applications dropped sharply last week

Conventional and government purchase activity declined last week, with the conventional index decreasing 11 percent and the government purchase index down 5.9 percent from the previous week. 

While all the other indices fell year over year, the government purchase index increased 3.3 percent on an unadjusted basis, the second straight increase. The government share of purchase activity has increased three consecutive weeks, to 43.5 percent, the highest level since April.

The refinance share of mortgage activity decreased to 77.6 percent of total applications from 79.1 percent the previous week. 

The share of purchase applications in the Pacific region increased in September to 19.6 percent from 18.9 percent in August while the share in the New England, East North Central and South Atlantic regions fell.  

Refinance applications in the Pacific decreased from the past month but increased in the Mid-Atlantic, East North Central and New England regions.

Wyoming had the largest increase in purchase applications while Vermont had the largest increase in refinance applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.33 percent from 4.25 percent.

Meanwhile, the rate for 30-year, fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.64 percent from 4.59 percent.

The rate for 30-year, fixed-rate mortgages backed by the FHA increased to 4.12 percent from 4.06 percent, while the rate for 15-year, fixed-rate mortgages increased to 3.61 percent from 3.53 percent.