Mortgage applications rebounding — for now

SALT LAKE CITY — Mortgage applications are heading up for the first time in nearly two months.

The number of U.S. mortgage applications rose 3.4% for the week ending Oct. 23 on a seasonally adjusted basis, according to the latest weekly survey by the Mortgage Bankers Association released Wednesday.

It's the first time since Sept. 2 that an increase in mortgage applications has been reported by the association.

But even though mortgage applications are up from the previous week, there were still 18% fewer than at the same time last year, said Joel Kan, the association's vice president and deputy chief economist.

The current boost in borrowers seeking money to buy a home is likely due to the recent dip in mortgage rates that gave them "some relief, with applications rebounding slightly, particularly conventional applications," Kan said.

"Mortgage rates are still more than a percentage point higher than the same week last year and most homeowners still have rates much lower than prevailing market rates," he said, adding that an increasing number of borrowers are turning to adjustable-rate mortgages

The weekly average mortgage rate in the U.S. for a 30-year, fixed-rate loan dropped as of last Thursday from a three-year high of 7.4% to 7.32%, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.

However, the daily index at Mortgage News Daily showed a slight hike in the rate for the same type of mortgage, from 7.33% to 7.35% Wednesday. Earlier this month, rates shot up amid a bond market sell-off, reaching as high as 7.6% on the Mortgage News Daily index.

It's the yield on long-term government bonds, not the interest rate set by the Federal Reserve, that has the most influence on mortgage rates. Wednesday, the Fed left its recently raised benchmark interest rate unchanged, but another increase could be coming in December.

The war against Iran, launched at the end of February by the U.S. and Israel, has fueled economic uncertainty that has affected financial markets as well as consumer costs. Just before the war began, mortgage rates had slipped below 6% for the first time since 2022.