The volume of mortgage applications in the U.S. declined for the third consecutive week, albeit at a slower rate for the week ending October 18, as the ongoing rise in interest rates continues to dampen demand, according to the Mortgage Bankers Association survey results released on Wednesday.
The Market Composite Index, which tracks the volume of mortgage loan applications, decreased by 6.7 percent following a 17 percent drop the previous week.
The average interest rate for 30-year fixed-rate mortgages remained stable at 6.52 percent.
The survey indicated that the purchase index decreased by 5 percent, reaching 131.4 from 138.4 the previous week, while the refinance index fell by 8 percent, moving to 672.6 from 734.6.
"Application volume has dropped to its lowest point since July, as both purchase and refinance activities have declined," noted Joel Kan, MBA’s Vice President and Deputy Chief Economist.
Kan also highlighted that purchase applications have been surpassing last year's levels for the fifth week in a row. He further explained that some potential homebuyers remain active in the market since rates, despite their recent increase, are still over one percentage point lower than the rates a year ago.
"There has been a loosening of for-sale inventory, and home-price appreciation has moderated in certain markets, offering more choices for buyers alongside these lower rates," Kan explained.
The weekly MBA survey encompasses U.S. closed-end residential mortgage applications that originate through retail and consumer direct channels, with participants including mortgage bankers, commercial banks, thrifts, and credit unions.
