Mortgage applications increased from a week earlier as mortgage rates increased four basis points, the Mortgage Bankers Association (MBA) said Wednesday.
According to the MBA’s Weekly Mortgage Applications Survey for the week ending August 5, the Market Composite Index, a measure of mortgage loan application volume, increased .02% on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index decreased .03%.
The Refinance Index also jumped, up 4% from the previous week, but it remained 82% lower than the same week last year.
The seasonally adjusted Purchase Index decreased 1%. The unadjusted Purchase Index dropped 2% compared with the previous week and was 19% lower than the same week last year.
“Mortgage rates remained volatile last week – after drops in the previous two weeks, mortgage rates ended up rising four basis points," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said. "“The purchase market continues to experience a slowdown, despite the strong job market. Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubts about the strength of the economy.”
The MBA reported that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased 5.47%, up from 5.43%
According to Freddie Mac’s weekly Primary Mortgage Market Survey report, released August 4, the 30-year fixed mortgage rate dropped to 4.99% from 5.3% the previous week.
“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” Freddie Mac said in its report. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.”
“The purchase market continues to experience a slowdown, despite the strong job market,” Kan said. “Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubt about the strength of the economy.”
A breakdown of mortgage activity from last week:
- The refinance share of mortgage activity increased 32% of total applications, up from 30.8% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased 7.4% of total applications, the MBA said
- The FHA share of total applications increased 12.1% from 11.9% the week prior.
- The VA share of total applications increased to 10.9% from 10.8% the week prior.
- The USDA share of total applications remained unchanged at 0.6% from the previous week.
A breakdown of average contract interest rates:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased 5.47%, up from 5.43%, with points increasing to .80 from .65 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.09% from 5.06%, with points increasing to .59 from .36 (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 decreased 3.5% from 5.39%, with points decreasing to 1.02 from 1.03 (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 remained at 4.74%, with points decreasing to .62 from .65 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMS increased to 4.6% from 4.55%, with points decreasing to .63 from .69 (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. Based periods and value for all indexes is March 16, 1990=100.
