Oct. 21 (UPI) -- Mortgage applications fell 0.6% last week from the week before, making the second straight weekly drop in the face of slight increases in mortgage rates, according to data from the Mortgage Bankers Association.
The MBA's Market Composite Index, which calculates the volume of mortgage loan applications, fell 0.6% on a seasonally adjusted basis and 1% on an unadjusted basis for the week ending Oct. 16.
The Refinance Index increased 0.2% from the week before and was 74% higher than the same week in 2019. The unadjusted Purchase Index tumbled 2% over the past week and was 26% higher than a year ago.
MBA data showed the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $510,400 or less increased to 3.02% from 3%. Joel Kan, the MBA's associate vice president of economic and industry forecasting, said the rate climb was the highest since late September.
"Despite the uptick in rates, refinance activity held steady, with FHA refinance applications posting a 17.6% increase, helping to offset declines in the other loan types," Kan said in a statement. "Homebuyer demand remains strong this fall, but purchase applications did decrease 2%, with both conventional and government purchase activity taking a step back."
Kan said the ongoing housing market recovery and low rate environment in both purchase and refinance applications remained robust compared to 2019.
The FHA-backed average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 3.12% while the rate for the 15-year fixed-rate mortgages leaped to 2.61% from 2.59%.