Mortgage applications decreased for the fourth straight week, the Mortgage Bankers Association (MBA) said Wednesday.
According to data from the MBA’s Weekly Mortgage Applications Survey for the week ending Sept. 2, 2022, the Market Composite Index — a measure of overall mortgage loan application volume — decreased 0.8% on a seasonally adjusted basis from a week earlier. On an unadjusted basis, the index decreased 2% from the previous week.
The Refinance Index decreased 1% from the previous week and was 83% lower than the same week one year ago. The refinance share of mortgage activity, however, increased to 30.7% of total applications from 30.3% the previous week.
The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index decreased 3% compared with the previous week and was 23% lower than the same week one year ago.
“Mortgage rates moved higher over the course of last week as markets continued to re-assess the prospects for the economy and the path of monetary policy, with expectations for short-term rates to move and stay higher for longer,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “With the 30-year fixed rate rising to the highest level since mid-June, application volumes for both purchase and refinance loans dropped.
“Recent economic data will likely prevent any significant decline in mortgage rates in the near term, but the strong job market depicted in the August data should support housing demand,” he continued. “There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity.”
Key highlights from the report:
- The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8.5% of total applications.
- The FHA share of total applications increased to 13.3% from 13% the week prior.
- The VA share of total applications decreased to 10.8% from 11.1% the week prior.
- The USDA share of total applications remained unchanged at 0.6% from the week prior.
The average interest rates rose last week for a variety of loans:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.94% from 5.8%, with points increasing to 0.79 from 0.71 (including the origination fee) for 80% loan-to-value ratio (LTV) 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 5.46% from 5.32%, with points decreasing to 0.4 from 0.48 (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 5.61% from 5.57%, with points decreasing to 1.06 from 1.09 (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 5.23% from 5.1%, with points increasing to 0.86 from 0.82 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs increased to 4.81% from 4.78%, with points increasing to 0.88 from 0.61 (including the origination fee) for 80% LTV loans. 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. The base period and value for all indexes is March 16, 1990=100.
