US Mortgage Applications Drop as Interest Rates Rise

The number of applications for mortgage loans in the United States recorded a significant drop last week, coinciding with the continued rise in mortgage interest rates, according to data from the Mortgage Bankers Association (MBA).

Indicators of Decline and Interest Rates

• Composite Index: The Market Composite Index, which measures the volume of mortgage applications, decreased by 5.2% (seasonally adjusted) for the week ending November 14, compared to a 0.6% rise in the previous week.

• Refinance Index: This index declined by 7%, after falling by 3% the previous week. The refinance share of total mortgage activity also dropped to 55.4%.

• Purchase Index: This index decreased by 2%, after rising by 6% in the prior week.

• Rate Increase: The average contract interest rate for 30-year fixed-rate mortgages continued to climb for the third consecutive week, reaching 6.37%, its highest level in four weeks.

Expert Analysis

• MBA Comment: Joel Kan, MBA's Vice President and Deputy Chief Economist, stated that application activity was lower over the week, with "prospective homebuyers moving to the sidelines once again, despite a slight increase in FHA purchase applications."