There has been a lot of bad news in the mortgage industry of late, and perhaps chief among them is the regular reports of declining affordability and originations. However, in the week ending Sept. 26, there was a bit of good news for a market that might need it.

While the overall mortgage application volume seen across the country last week declined 0.2 percent from the previous seven-day period on a seasonally adjusted basis, there was actually a fairly significant step forward in the number of requests filed for conventional purchase loans, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association. In all, it moved up a seasonally adjusted 1.3 percent to the highest mark seen since July. This served to keep overall purchase requests flat for the week (though still down 11 percent on an annual unadjusted basis) and also offset some of the declines sparked by a 0.3 percent drop in refinance requests.

As a consequence of these shifts, the share of refinances in the overall mortgage market was essentially unchanged at 56 percent for the week, the report said. Meanwhile, the share of activity for adjustable-rate mortgages took another hit, falling to 7.6 percent.

Do rates tell the story?
Perhaps the recent shifts in mortgage rates overall might serve to explain all three of these changes in application volumes, the report said. For instance, those for conventional 30-year home loans – used primarily for purchases – slipped to an average of 4.33 percent from the previous week's 4.39 percent, granting a bit more affordability. Meanwhile, there was little change in those for 15-year FRMs – favored by current owners who are refinancing existing home loans – which slipped to 3.55 percent from the previous week's 3.56 percent.

Meanwhile, rates for five- and one-year adjustable mortgages actually took a huge step forward, rising to an average of 3.31 percent from the previous week's 3.2 percent, the report said. This may be a clue as to why there was such an appreciable dropoff in the share of the market taken up by this loan type specifically.

Rate changes typically have a big impact on consumers' opinions about the mortgage industry and their chances for finding a good deal in it. However, it should be noted that for the potentially dour attitudes many may have these days, affordability remains quite favorable in comparison with the levels seen prior to the recession.