In what would appear the latest downward plunge of a perpetual yo-yo, the volume of mortgage applications fell across the country last week, according to data from the Mortgage Bankers Association and the Mortgage Maxx LLC. In fact, the MBA data suggests that applications are now at an 8-year low. The MBA on Wednesday morning released its weekly survey, which showed a seasonally adjusted 20.3 percent decrease in applications for the week ending Oct. 31. Composite applications (refi and purchases) decreased 21.1 percent on an unadjusted basis from the previous week, the MBA said, and 43.4 percent from the same week last year. Both components of applciation activity fell. The MBA’s refi index dropped 27.8 percent from the previous week, while purchase applications fell 13.9 percent. The data showed a 14.4 percent increase in the conventional purchase index and a 12.8 percent increase in the government purchase index, however, which MBA attributed largely to efforts by the Federal Housing Administration. Refinancing applications have jumped around significantly this month, reflecting strong swings in mortgage rates. “Since mid-October, the refinance index followed a yo-yo pattern, posting double-digit percentage point changes spurred by 40-plus basis point swings in mortgage rates,” analysts at Barclays Capital wrote in a research note Wednesday. Mortgage Maxx’s separate Mortgage Application Index (the MAX) showed a 9.1 percent decline in application volume for the week, as well, having “lost a third of its value since the beginning of September” due to distress in real estate and financial markets, the report read. While REO sales continue to play a major role in driving home sales volume, they appear to have potentially peaked, according to the MAX data. “As inventory gets grudgingly sold, organic sales are by definition dismal,” publisher Paul Descloux said in the weekly MAX report. “The collateral damage by way of comps may well exacerbate an already abysmal market for non-distressed sellers.” For more information, visit http://www.mortgagebankers.org and http://www.mortgagemaxx.us. Write to Diana Golobay at diana.golobay@housingwire.com.

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