Mortgage applications fell by 2.5% on a seasonally adjusted basis for the week ending October 26th, 2018, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

On an unadjusted basis, the Market Composite Index fell 3% from the previous week. The Refinance Index fell by 4% over the same period, and both the seasonally adjusted and unadjusted Purchase Index fell 2%.

The refinance share of mortgage activity fell to 39.4% of total applications, down from 39.8% the previous week. The adjustable-rate mortgage (ARM) share rose to 7.6%, its highest level since May 2017. The FHA share increased to 10.3% from 10.1%, the VA share decreased to 9.8% from 10.1%, and the USDA share remained unchanged at 0.7%.

“The 30-year fixed-rate mortgage held steady over the week, but total applications decreased overall. Purchase applications inched backward from the previous week, as well as compared to one year ago – the first year-over-year decline in purchase activity since August,” says Joel Kan, AVP of industry surveys and forecasts. “Purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks. Additionally, the ARM share of applications increased to its highest level since 2017, but since this is a compositional measure, it was driven by a greater decrease in applications for fixed-term loans relative to the decrease in ARM applications.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 5.11%. Points for 80% loan-to-value ratio (LTV) loans fell to 0.50 from 0.52. (All 80% LTV loan reports include the origination fee.) The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) fell to 4.94% from 5.01%. Points for 80% LTV loans remained unchanged at 0.28, and the effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to 5.08% from 5.07%. Points for 80% LTV loans rose to 0.62 from 0.61, and the effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages rose to 4.55% from 4.50%. Points for 80% LTV loans fell to 0.51 from 0.55, and the effective rate increased from last week.

The average contract interest rate for 5/1 ARMs fell to 4.33% from 4.47%. Points for 80% LTV loans rose to 0.42 from 0.37, and the effective rate decreased from last week.