Mortgage applications fell last week as interest rates rose slightly and falling demand for refinancing offset an increase in purchase applications.
The Mortgage Bankers Association said Wednesday that its index of mortgage activity, which includes both refinance and purchase activity, fell by 1.2% for the week ended Oct. 5 from a week earlier, after adjustment for seasonal variations.
The refinance index fell 2% from the prior week, while the purchase index rose 2%, according to the trade group.
"Refinance applications declined somewhat last week although volume is still near three-year highs, and purchase applications increased to the highest level since June, with both conventional and government volumes increasing," Mike Fratantoni, the association's vice president of research, said in a news release. "Rates on 30-year fixed-rate loans remain historically low, benefitting both prospective homebuyers and those seeking to refinance."
Fixed-rate, 30-year mortgages with loan balances of $417,500 or less averaged 3.56%, up from 3.53% a week earlier. The average rate on 30-year fixed-rate mortgages with loan balances greater than $417,500 fell to 3.74% from 3.82%, the lowest rate in the weekly survey's roughly 112-year history.
The average rate for 30-year fixed-rate loans backed by the Federal Housing Administration fell to 3.34%, also an all-time low.
The survey covers more than 75% of all U.S. residential mortgage applications, according to the group.