the numbers mortgage applications fell 45 this week as higher mortgage rates dragged down the housing sector applications fell for the fourth month in a row to the lowest level since 1997 from builder sentiment to home sales rates which are a hair’s breadth away from 7 have hit home buyers and homeowners looking to refinance rates weighed down the market composite index a measure of mortgage application volume the mortgage bankers association mba said on wednesday the market index dropped 45 to 2046 in the week ending october 14 a year ago the index stood at 643 but applications for adjustablerate mortgages rose to the highest level since march 2008 key details the refinance index plunged by 68 and was down 86 compared to a year ago the purchase index which measures mortgage applications for the purchase of a home fell by 37 from the previous week the adjustablerate mortgage share of activity rose to 128 applications which is a significant increase the average contract rate for the 30year mortgage for homes sold for 647200 or less was 694 for the week ending october 14 that’s up from 681 the week before the mba said for homes sold for over 647200 the average rate for the 30year was 631 the rate for adjustablerate mortgages rose to 565 the big picture with the 30year almost a percent higher than an adjustablerate mortgage buyers are opting for the latter though the share of adjustablerate mortgages has risen to levels last seen in 2008 which may trigger memories of the great recession for some it’s still nowhere near its peak in 2004 and early 2005 adjustablerate mortgages comprised a third of overall mortgage applications according to mba data overall mortgage applications which give us an early read on the state of the housing market tell us that the sector continues to take a beating as rates rise to the highest level in 20 years “the speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market” joel kan vice president and deputy chief economist at the mba said in a statement he added that housing activity from housing starts to home sales has been “on downward trends coinciding with the rise in rates” how that affects home buyers with a 2000 average monthly payment you would’ve been able to afford roughly a 460000 home a year ago with the 30year at 323 and with 20 down now with rates at 694 a buyer would be able to only afford a home roughly worth 302000 market reaction the yield on the 10year treasury note tmubmusd10y rose above 4 in early morning trading have any thoughts on the housing market write to marketwatch reporter aarthi swaminathan at aarthimarketwatchcom