New applications for U.S. home loans dropped more than 9 percent last week even as average 30-year mortgage rates also eased from the previous week, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted market index, a measure of mortgage activity, dropped 9.2 percent to 658.2 for the week ended on Oct. 8, down from the previous week’s 724.8.
Thirty-year mortgage rates, excluding fees, averaged 5.69 percent, down 0.09 percentage point from the previous week and 0.12 percentage point lower than a year ago, the Washington trade group said.
Treasury yields, which lenders use to set mortgage rates, fell late last week after a weak employment report revived talk the Federal Reserve might slow the pace of interest rate increases.
The MBA’s seasonally adjusted index on new refinancing applications fell by 14.2 percent to 1,949.2 for last week from the previous week’s 2,270.8.
Last week marked the first time the refinancing index has fallen since the week of Aug. 27. The refinancing index is nearly 17 percent below its year-ago level of 2340.1.
The refinancing share of total new applications for last week was 44.5 percent, down from the prior week’s 47.1 percent, the group said.
The association’s purchase index, a gauge of new loan requests for home purchases, fell by 4.9 percent last week to 436.3 from 459.0 in the prior week.
The adjustable-rate mortgage share of last week’s activity rose for the second week in a row to 34.9 percent of total applications from 33.9 percent the previous week, the group said. Last week was the highest for the ARM percentage share since the week ended May 14.