Trends

Weekly mortgage applications fall 7%

The Mortgage Banker Association (MBA) said that its Market Composite Index--a seasonally adjusted index of mortgage application activity--fell by 7% for the week ended November 1.

The measure's two components, the refinance index and the purchase index, decreased by 8% and 5%, respectively.

Mortgage refinancing constituted 66% of market activity for the week ending November 1, down from 67% the week before (HousingWire Nov. 6).

The decline comes as the Federal Reserve indicates it might cut back this year on the $85 billion in treasury bonds and mortgage-backed securities that it's currently buying every month--a change that would occur sooner than previously anticipated (Reuters Nov. 6).

The index's November 1 decline is the first one-week drop greater than 1% in months. Refinancing activity had driven growth in the measure throughout the partial government shutdown, anticipation of the gridlock and during market aftershocks in the wake of Congress' October 16 agreement.

A four-week moving average gauge of refinance activity was up by 9.3% over the past month, but down by 56% on an annual basis. Purchase applications fell by 6.2% during the same time--down by 3.8% on an annual basis. A four-week moving average measure of purchase applications fell by about 18% over the past six months (Moody's Economy.com Nov. 6).