Mortgage applications decrease despite free-falling rates

After last week’s big 9.3 percent jump, nationwide mortgage applications fell to earth for the week ending Sept. 30, decreasing 4.3 percent on a seasonally adjusted basis, according to weekly data from the Mortgage Bankers Association released today.

Refinancings also decreased this week, falling 5.2 percent from the previous week, on an unadjusted basis. That index is not seasonally adjusted.

The refinance share of mortgage activity decreased to 79.1 percent of total applications from 79.7 percent the previous week. The adjustable-rate mortgage share of activity increased to 6.4 percent of total applications, from 6.1 percent the prior week.

Meanwhile, mortgage rates continued to sink lower. The average contract interest rate for 30-year fixed-rate mortgages with comforming loan balances (less than $417,500 under a new law) decreased to 4.18 percent from 4.24 percent, while jumbo loans decreased to 4.49 percent from 4.53 percent. For FHA-backed 30-year fixed-rate mortgages the average rate declined one-hundredth of a percentage point to 4.05 percent. But the average contract interest rate for 15-year fixed-rate mortgages increased to 3.49 percent from 3.46 percent. — Adam Fusfeld