WASHINGTON (11/7/13)--A prominent mortgage trade association's survey showed that mortgage market activity declined significantly last week.
The Mortgage Banker Association said that its Market Composite Index--a seasonally adjusted index of mortgage application activity--fell by 7% for the week ended Nov. 1.
The measure's two components, the refinance index and the purchase index, decreased by 8% and 5% respectively.
Mortgage refinancing constituted 66% of market activity for the week ending Nov. 1, down from 67% the week before (HousingWire Nov. 6).
The decline comes as the Federal Reserve indicates it might cut back this year on the $85 billion in treasury bonds and mortgage-backed securities that it's currently buying every month--a change that would occur sooner than previously anticipated (Reuters Nov. 6).
The index's Nov. 1 decline is the first one-week drop greater than 1% in months. Refinancing activity had driven growth in the measure throughout the partial government shutdown, anticipation of the gridlock and during market aftershocks in the wake of Congress' Oct. 16 agreement.
A four-week moving average gauge of refinance activity was up by 9.3% over the past month, but down by 56% on an annual basis. Purchase applications fell by 6.2% during the same time--down by 3.8% on an annual basis. A four-week moving average measure of purchase applications fell by about 18% over the past six months (Moody's Economy.com Nov. 6).