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For 1st Time In 6 Weeks, Mortgage Applications Increase

David Krechevsky
Sep 21, 2022
Photo credit: Getty Images/phototechno

MBA economist says the nearly 4% increase 'underscores the overall volatility' of the current housing market.

Mortgage applications increased nearly 4% from a week earlier, the first increase in six weeks, according to the latest Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Sept. 16. 

Last week’s results include an adjustment for the Labor Day holiday, the MBA said.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.8% on a seasonally adjusted basis from a week earlier. On an unadjusted basis, the index increased 14% compared with the previous week. The increase in the index followed five straight weeks of declines.

The Refinance Index increased 10% from the previous week, but remained 83% lower than the same week last year. 

The seasonally adjusted Purchase Index increased 1% from a week earlier. The unadjusted Purchase Index increased 11% compared with the previous week, but was 30% lower than a year earlier.

“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce — in their efforts to slow inflation — another sizable short-term rate hike,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25% — the highest since October 2008.”

“As with the swings in rates and other uncertainties around the housing market and broader economy,” he continued, “mortgage applications increased for the first time in six weeks but remained well below last year’s levels, with purchase applications 30% lower and refinance activity down 83%. The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”

The refinance share of mortgage activity increased to 32.5% of total applications from 30.2% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 9.1% of total applications.

The FHA share of total applications decreased to 13.3% from 13.4% the previous week. The VA share of total applications decreased to 10.9% from 11.3% the previous week. The USDA share of total applications decreased to 0.6% from 0.7% the previous week.

Other key highlights from the report:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.25% from 6.01%, with points decreasing to 0.71 from 0.76 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.79% from 5.56%, with points increasing to 0.46 from 0.39 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. 
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.85% from 5.71%, with points increasing to 1.15 from 1.12 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.\
  • The average contract interest rate for 15-year fixed-rate mortgages increased to 5.40% from 5.30%, with points increasing to 1.06 from 0.89 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 5/1 ARMs increased to 5.14% from 4.83%, with points increasing to 0.99 from 0.52 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.

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