MBA: 30-Year Contract Rate Hits 7.49% as Mortgage Applications Fall 4.2%

Why this matters: The MBA survey shows how borrowers reacted to last week's rate jump, not where rates are this morning. Higher rates cut refinancing almost in half compared with a year ago and pushed some buyers out of the market.

Cover: falling application bars and a rising rate line beside a calendar. Illustration created for mortgage.news; it does not depict a real person, property or document.

What MBA reported Wednesday

The Mortgage Bankers Association released its Weekly Mortgage Applications Survey on Wednesday, October 7. The data cover the week ending Friday, October 2, so they describe last week's activity.

• The Market Composite Index, which measures application volume, fell 4.2% from the prior week on a seasonally adjusted basis.
• The Refinance Index fell 7.5% and was 56% below the same week a year ago.
• The seasonally adjusted Purchase Index fell 2.1%. Unadjusted purchase applications were 15% below a year earlier.
• The refinance share of applications slipped to 37.0% from 38.3%. The adjustable-rate share held at 10.3%.

The 7.49% figure is a contract-rate average

MBA said the average contract rate on a 30-year fixed loan with a conforming balance ($832,750 or less) rose to 7.49% from 7.30%, with points rising to 0.84 from 0.75, including the origination fee, for loans with 20% down. The FHA 30-year average rose to 7.14% from 6.97%, and the 15-year fixed average rose to 6.71% from 6.56%.

That series averages rates on applications lenders took during the survey week. It is not a quote you can lock today. It is also different from Freddie Mac’s weekly PMMS, which stood at 7.28% at the end of September according to Zillow’s monthly report, and from daily rate estimates published by other outlets. Each uses a different method, so the numbers will not match.

Joel Kan, MBA's deputy chief economist, said rates reached their highest level in almost three years "as both Treasury rates increased and spreads widened with the increase in rate volatility." He added that FHA purchase applications fell the most, down 6%, according to the MBA release.

What is still pending today

The minutes of the Federal Reserve's September 15-16 meeting are scheduled for release at 2:00 p.m. Eastern Time today, according to the Fed calendar. They were not public when this article was published. Minutes describe a past meeting and do not change the federal funds rate.

What borrowers can do

• Compare quotes on the same day, with the same loan amount, down payment and lock period.
• Ask for the points or credits behind each rate. MBA's own average rose in both rate and points.
• If you are already locked, confirm the expiration date and any extension cost in writing.
• Treat a weekly survey as background. Your quote depends on your credit, loan type and the day it is priced.

The takeaway

MBA's data confirm that last week's rate jump slowed both refinancing and purchase demand. The 7.49% average is a lagging survey figure, not today's price, so ask lenders for a current written quote.