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MBA: Mortgage Applications Fell 5.4% Last Week

David Krechevsky
Jul 05, 2022
Applications for home loans all but dried up, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Nov. 11

Rates fell for second-straight week, but purchase applications hurt by low inventory and affordability challenges.

KEY TAKEAWAYS
  • The Market Composite Index, a measure of mortgage loan application volume, decreased 5.4% on a seasonally adjusted basis from a week earlier.
  • The seasonally adjusted Purchase Index decreased 4% from a week earlier.
  • The Refinance Index decreased 8% from the previous week and was 78% lower than the same week one year ago.

Despite mortgage rates falling for a second straight week, mortgage applications decreased 5.4% from a week earlier, according to the Mortgage Bankers Association (MBA).

Results of the MBA’s Weekly Mortgage Applications Survey for the week ending July 1 include a holiday adjustment to account for early closings the Friday before Independence Day.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.4% on a seasonally adjusted basis from a week earlier, the MBA said. On an unadjusted basis, the index increased 6% compared with the previous week. 

The Refinance Index decreased 8% from the previous week and was 78% lower than the same week one year ago.

The seasonally adjusted Purchase Index, meanwhile, decreased 4% from a week earlier. The unadjusted Purchase Index increased 7% compared with the previous week and was 17% lower than the same week one year ago.

“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Mortgage rates have increased sharply thus far in 2022, but have fallen 24 basis points over the past two weeks, with the 30-year fixed rate at 5.74%.”

“Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed,” Kan continued. “Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance."

A glance at mortgage activity:

  • The refinance share of mortgage activity decreased to 29.6% of total applications from 30.3% the previous week. 
  • The adjustable-rate mortgage (ARM) share of activity decreased to 9.5% of total applications.
  • The FHA share of total applications remained unchanged at 12% from the week prior.
  • The VA share of total applications decreased to 11.1% from 11.2% the previous week.
  • The USDA share of total applications remained unchanged at 0.6% from a week earlier.

The average contract interest rate for 30-year, fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.74% from 5.84%, with points increasing to 0.65 from 0.64 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year, fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 5.28% from 5.42%, with points increasing to 0.44 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year, fixed-rate mortgages backed by the FHA decreased to 5.60% from 5.62%, with points decreasing to 0.89 from 1.15 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year, fixed-rate mortgages decreased to 4.96% from 5.06%, with points decreasing to 0.68 from 0.72 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 4.62% from 4.64%, with points increasing to 0.72 from 0.72 (including the origination fee) for 80% LTV loans. The effective rate decreased 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.

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