Mortgage application volume tanked last week, falling 16.6 percent on a seasonally adjusted basis compared to one week earlier, according to the MBA’s latest survey.
On an unadjusted basis, accounting for the Columbus Day holiday, apps were off 25 percent from the previous week and 44 percent compared with the same week a year ago.
The drop in apps was seen across the board, with a 23.5 percent slide in refinance activity, an 11.9 percent decrease in FHA lending, and a 10.9 percent drop in purchase lending.
The refinance share of mortgage activity decreased to 42.6 percent of total applications, down from 46.4 percent the prior week.
Interest rates actually improved during the week, but had shot up sharply before easing, deterring many would-be borrowers from applying for both refinances and purchase loans.
The 30-year fixed averaged 6.28 percent, down from 6.47 percent, while the 15-year fixed fell to 6.05 percent from 6.17 percent.
The one-year adjustable-rate mortgage surged 30 basis points to 6.97, which may explain why the ARM-share of total activity is a mere 2.7 percent of total applications.
Keep in mind the MBA survey only factors in retail applications from the largest banks and lenders, which have clearly taken a larger share of the market in recent months as wholesalers are all but extinct at this point.
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