Of the total applications, the refinance share of mortgage activity was up four basis points to 28.6%, while the adjustable-rate mortgage share of activity decreased to 11.8%. The FHA share of total applications fell to 13.5%, the VA share dropped to 10.3%, and the USDA share of total applications remained unchanged at 0.5% from a week ago.
“Apart from the ARM loan rate, rates for all other loan types were more than three percentage points higher than they were a year ago,” Kan said. “These elevated rates continue to put pressure on both purchase and refinance activity and have added to the ongoing affordability challenges impacting the broader housing market, as seen in the deteriorating trends in housing starts and home sales.”
Read more: What’s behind the continual decline in pending sales?
According to the National Association of Realtors, pending home sales in September tumbled 10.2% from August and were down 31% from a year ago. New home listings also dwindled annually since many homeowners were holding on to the ultra-low mortgage rates they locked in during the housing boom. Overall housing starts declined as well, to a seasonally adjusted rate of 1.44 million in September.