After falling for three straight weeks, mortgage application volume increased last week as both purchase and refinance mortgages rose, the Mortgage Bankers Association (MBA) said Wednesday.
The MBA also noted that, after receiving revised data from one participant in its Weekly Mortgage Application Survey, it revised the survey’s results for seven previous weeks — from the week ended 1/13/2023 to 2/24/2023.
The latest results, for the week ended March 3, are compared to the revised results from the week ended Feb. 24, the MBA said.
According to those results, the Market Composite Index — a measure of mortgage loan application volume — increased 7.4% on a seasonally adjusted basis from a week earlier. Unadjusted, the Index increased 9% from the previous week.
The Refinance Index increased 9% from the previous week, but remained 76% lower than the same week last year.
The seasonally adjusted Purchase Index increased 7% from the previous week. Unadjusted, the Purchase Index increased 9% from the previous week, but was still 42% below where it was a year earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said applications rose even though mortgage rates continued to increase last week.
“The 30-year fixed rate rose to 6.79% — the highest level since November 2022, and 270 basis points higher than a year ago,” Kan said. “Even with higher rates, there was an uptick in applications last week, but this was in comparison to two weeks of declines to very low levels, including a holiday week.”
He continued, “Comparing the application indices from a year ago, purchase applications were still down 42%, and refinance activity was down 76%. Many borrowers are waiting on the sidelines for rates to come back down.”
The refinance share of mortgage activity increased to 28.9% of total applications from 28.7% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.6% of total applications.
The FHA share of total applications increased to 12.8% from 12% the previous week. The VA share of total applications increased to 12% from 11.6% the previous week. The USDA share of total applications remained at 0.5% for the second straight week.
Mortgage Rates
Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.79% from 6.71%, with points increasing to 0.8 from 0.77. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.49% from 6.44%, with points increasing to 0.59 from 0.49. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.56% from 6.45%, with points increasing to 1.21 from 1.19. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.25% from 6.13%, with points increasing to 1.01 from 0.93. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs increased to 5.75% from 5.73%, with points increasing to 0.95 from 0.86. The effective rate increased from last week.
MBA’s 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.
About Those Revisions
MBA said revisions to the highlighted seven-weeks of data were necessary, with the the originatl data showing lower purchase and higher refinance application volume than the revised data.
It said the effects of the revision include:
- The non-seasonally adjusted market index shows only small changes in some weeks within this interval.
- The unadjusted purchase index is higher across all weeks post-revision compared to pre-revision. It should be noted that the seasonally adjusted purchase index is still at a 28-year low for the week ending Feb. 24, despite its increase after the revision.
- The unadjusted refinance index is lower across all weeks post-revision compared to pre-revision.
- The unadjusted government index was minimally affected across all weeks.
- Interest rates were largely unaffected. The one exception, the MBA said, is for the 15-year FRM rate for the week ending Jan. 13, which is now slightly higher.
The MBA said it maintained the holiday adjustments applied to the data pre-revision, including a half-day adjustment for Martin Luther King Jr. Day for week ended Jan. 20, and no adjustment for Presidents’ Day for week ended Feb. 24.
Seasonal adjustments were re-estimated and changed slightly as a result of the revision to the unadjusted data, the MBA said.
