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MBA Weekly Survey Shows Major Drop In Refi Apps

Keith Griffin
Mar 30, 2022
Mortgage Bankers Association Logo

Minor increase in purchase applications seen as positive development.

KEY TAKEAWAYS
  • The survey shows refi applications dropped 14.9% for the week ending March 25, 2022.
  • Purchase applications were up 1% last week but are still down 10.1% from a year ago.
  • ARM share of activity increased to 6.6% of total applications.

A large drop in refinance applications is behind a 6.1% decrease in mortgage applications from one week ago, according to the Weekly Mortgage Application Survey from the Mortgage Bankers Association.

The survey shows refi applications dropped 14.9% for the week ending March 25, the MBA said in a news release. They are down 57.5% compared to the same week in 2021. FHA refi applications are down 68.5%, while VA refis are down 68.4%. 

Refinance applications accounted for 40.6% of overall applications. The refinance share of mortgage activity decreased from 44.8% the previous week.

"Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve," said Mike Fratantoni, MBA senior vice president and chief economist. "Not surprisingly, refinance application volume declined further, as fewer borrowers have an incentive to apply at rates that are significantly higher than a year ago. Refinance application volume is now 60% below last year's levels, in line with MBA's forecast for 2022."

Purchase applications were up 1% last week, but are still down 10.1% from a year ago.

"Even with the ongoing climb in rates, purchase application volumes were little changed last week," Fratantoni said. "This is particularly auspicious, as we are now in the beginning of the spring homebuying season, and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but also an ongoing shortage of homes on the market. Given these hurdles, it appears to be promising news that purchase application volume has not declined, as many potential buyers are likely feeling the squeeze in their purchasing power from the jump in rates."

The adjustable-rate mortgage (ARM) share of activity increased to 6.6% of total applications. The FHA share of total applications increased to 9.3% from 8.8% the week prior. The VA share of total applications decreased to 9.5% from 9.8% the week prior.

The average contract interest rate for 30-year, fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.8% from 4.5%, with points decreasing to 0.56 from 0.59 (including the origination fee) for 80% loan-to-value ratio 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 4.4% from 4.11%, with points decreasing to 0.44 from 0.51 (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 4.66% from 4.4%, with points decreasing to 0.71 from 0.73 (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 4.01% from 3.76%, with points remaining unchanged at 0.55 (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.

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