Total applications for home loans dropped during the week ending October 26, according to mortgage records from the Mortgage Bankers Association.
Overall, the Market Composite Index, a reading of total mortgage application volume, dropped 4.8 percent compared to one week earlier, MBA's Weekly Mortgage Applications Survey explained. In addition, the Refinance Index fell 6 percent week-over-week. This put the figure at its lowest point in two months.
However, the situation is not considered to be poor by some experts, as property data showed some improvements in recent months.
"Overall, the housing data has been favorable," Daniel Silver, economist at JPMorgan, told Reuters. "New home construction, new home sales - levels are still very weak, but you see growth rates picking up, and it is pretty clear that it is on an upward trend."
Despite the declines, the report showed that the Purchase Index actually improved, as it inched up 1 percent from the previous week's level.
Mortgage activity also experienced a decline in mortgage refinances. According to the report, this share of loan application activity dropped to 80 percent, which was one percentage point lower than the previous week's figure. Additionally, the share of activity for adjustable-rate mortgages fell to 4 percent of all loan applications during that period.
Mortgage rates stabilize in October
The drop in mortgage applications in the MBA's report may have been due to the slight increases in home loan rates during that period, despite still hovering around record-low levels.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.41 percent during the week ending October 25. This was slightly higher than the previous week's figure of 3.37 percent. Additionally, the 15-year fixed-rate mortgage averaged 2.72 percent, a gain from the 2.66 percent recorded one week earlier.
The five-year Treasury-indexed hybrid adjustable-rate mortgage average was 2.75 percent during late October, but the report noted this was no different from the previous week's figure.
Frank Nothaft, vice president and chief economist for Freddie Mac, noted that the still-low levels may help improve the mortgage refinance industry in the long-run, as well as the housing market, as a whole. Additionally, real estate records showed that existing-home sales were at the highest year-over-year rate in two years.