The Mortgage Bankers Association’s (MBA) weekly mortgage applications survey revealed that mortgage applications decreased yet again from one week earlier. The Market Composite Index, a measure of mortgage loan application volume, reduced 6.5% on a seasonally adjusted basis from one week earlier.
On an unadjusted scale, the index dropped 17% compared with the previous week.
Additionally, the refinance index decreased 6% from the previous week, while the seasonally adjusted purchase index decreased 7% from one week earlier.
“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "The 30-year fixed rate increased to 5.4% after three consecutive declines. While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week."
Kan added, "The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months. These worsening affordability challenges have been particularly hard on prospective first-time buyers.”
Not all rates decreased in this week’s survey: The refinance share of mortgage activity increased to 32.2% of total applications from the previous week’s 31.5%, and the FHA share of total applications increased to 11.3% from 10.8% the week prior.
Other highlights from the survey include:
- The VA share of total applications increased to 11.4% from 10.2% one week ago.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 5.4% from 5.33%.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 4.62% from 4.59%, with points increasing to 0.65 from 0.63 (including the origination fee) for 80% Loan-to-Value (LTV) loans.
- The average contract interest rate for 5/1 ARMs increased to 4.51% from 4.46%, with points remaining at 0.68 (including the origination fee) for 80% LTV loans.
