Mortgage Applications Fall Again as Higher Interest Rates Sideline Buyers

Mortgage applications fell once again last week, as higher inflation and continuing uncertainty over the global economy kept interest rates climbing for the seventh straight week.For the week ending Oct. 9, the Mortgage Bankers Association's Market Composite Index—a measure of total mortgage loan application volume—fell 2.7% on a seasonally adjusted basis from one week earlier.The Purchase Index, which measures the volume of mortgage applications to purchase a single-family home, decreased 4% from one week earlier after seasonal adjustment. Purchase applications were down 16% from a year ago.According to MBA calculations, the average contract interest rate for 30-year fixed mortgages with conforming loan balances hit 7.5%, up from 7.49% last week, the highest they've been been since November 2023 and a percentage point higher than they were a year ago.Mortgage rates jumped to 7.4% last week, up from 6.66% in late August—an increase of 74 basis points, according to Freddie Mac.That equates to "a 7.2% loss of purchasing power, or over $22,000 in house price for a buyer with a $2,000 monthly principal and interest budget," explains Realtor.com® senior economist Jake Krimmel. "Given th...