Home loan applications in the U.S. declined for a second week in a row, but at a slower pace, and there was an increase in demand for the riskier adjustable-rate mortgages as homebuyers look for best deals, survey data from the Mortgage Bankers Association showed on Wednesday.
The market composite index, a measure of the house purchase mortgage loan application volume, fell a seasonally adjusted 4.7 percent in the week ended October 3 after a 12.7 percent slump in the previous week.
The MBA survey also showed that the refinance index declined 8 percent, which was much slower than the 21 percent drop in the previous week. The purchase index dropped 1 percent, same as in the previous week.
The refinance share of mortgage activity decreased further to 53.3 percent of total applications from 55.0 percent in the previous week.
The 30-year fixed mortgage rate fell to 6.43 percent, after climbing to 6.46 percent in the previous week.
Despite the recent weakening, purchase activity continues to show moderate growth on an annual basis, and stronger growth for FHA loans, favored by first-time homebuyers, the economist noted.
The survey showed that the adjustable-rate mortgage, or ARM, share of activity climbed to 9.5 percent of total applications from 8.4 percent.