According to the Mortgage Bankers Association’s most recent poll, mortgage demand is still declining despite rising mortgage interest rates (MBA). According to the survey, the mortgage composite index for the week ending October 7 decreased 68.7% from the same time in 2021 and 2% from the previous week on an adjusted basis.

The refinance index fell 1.8% from the prior week and was 86% lower than during the same week. Meanwhile, the seasonally adjusted purchase index fell 39% from this time last year and was down 2.1% from a week earlier.

The housing market will benefit from the news that employment growth and salary growth persisted in September as more excellent wages promote housing demand, Mike Fratantoni, senior vice president of the MBA and Chief Economist, said in a statement. However, it also delayed the chance of any impending change in the Federal Reserve’s intentions for further rate increases.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan sums (more than $647,200) rose to 6.25% last week from 6.14% the week before, according to the MBA survey. For 5/1 ARMs, the typical contract interest rate rose from 5.36% to 5.56% for the same period.

The proportion of FHA applications in total grew from 13.2% to 13.5% the previous week. VA’s percentage increased from 10.7% to 10.9%. In the meantime, the USDA’s share marginally dropped from 0.6% over the same period to 0.5% on October 12. Refinancing demand has virtually disappeared due to the sharp rise in interest rates; last week, it accounted for 29% of all mortgage applications, down from 30.2% two weeks earlier. To read more on demand in the mortgage industry, click here.