Mortgage Applications Fall Again as the 30-Year Hits 7.49%, the Highest in Nearly Three Years

Mortgage demand keeps sliding as rates keep climbing. The Mortgage Bankers Association reported Wednesday that applications fell 4.2% on a seasonally adjusted basis for the week ending Oct. 2, the second straight weekly decline, as the 30-year fixed rate reached 7.49% - the highest level in almost three years, per MBA vice president and deputy chief economist Joel Kan.

The refinance market is the clearest casualty. The Refinance Index dropped 8% for the week and stood 56% below the same week a year ago - the lowest refinance volume since 2025 and less than half of last year's pace. Kan said rising Treasury yields and widening spreads from increased rate volatility drove the jump, and that very few homeowners have any incentive to refinance at these rates.

Purchase activity fell across every loan type, with the Purchase Index down 2% for the week and 15% below a year ago. FHA purchase applications fell the most at 6%, a sign that the higher rates are hitting first-time and entry-level buyers hardest. As in recent weeks, more borrowers are opting for adjustable-rate mortgages to lower their initial payments, with the ARM share steady at 10.3% and the refinance share of activity slipping to 37.0%.

For South Bay buyers, the read is the same one the data keeps giving: competition keeps thinning as rate-sensitive buyers step back - FHA retreats and a frozen refi market mean fewer bidding wars - but the buyers who stay in need creative structure, whether that is an ARM, a seller-paid buydown, or simply more concessions from sellers who are already contributing to more than half of LA-area deals. Shopping multiple lenders matters more than ever when spreads are this volatile.

Source: Mortgage Bankers Association via HousingWire - https://www.housingwire.com/articles/mortgage-applications-fall-7-49/

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