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Mortgage Applications Fall To 22-Year Low

Sarah Wolak
Jul 27, 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

MBA says applications decreased nearly 2% from last week, the fourth straight weekly decline.

KEY TAKEAWAYS
  • Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000.
  • The Refinance Index decreased 4% from the week prior and was 83% lower than the same week one year ago.

Mortgage applications decreased 1.8 % from one week earlier, to the lowest level in 22 years, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 22.

The Market Composite Index, which measures mortgage loan application volume, decreased 1.8% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week. 

The Refinance Index decreased 4% from the week prior and was 83% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 % from one week earlier. The unadjusted Purchase Index decreased 0.4% compared with the previous week and was 18% lower year-over-year.

“Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. "Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic."

Kan continued, “Weakening purchase applications trends in recent months have been consistent with data showing a slowdown in sales for newly constructed homes and existing homes. A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year.”

The refinance share of mortgage activity decreased to 30.7% of total applications from 31.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.1% of total applications.

The FHA share of total applications slightly decreased to 12.1% from 12.4% the week prior. The VA share of total applications and the USDA share of total applications both remained unchanged from last week's data at 10.6% and at 0.6%, respectively.

Other key findings:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 5.74% from 5.82%, with points decreasing to 0.61 from 0.65 for 80% loan-to-value ratio (LTV) loans. 
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances — greater than $647,200 — increased to 5.32% from 5.31%, with points increasing to 0.43 from 0.38 for 80% LTV loans. 
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.54% from 5.5%, with points decreasing to 0.85 from 1.02 for 80% LTV loans.
  • The average contract interest rate for 15-year fixed-rate mortgages increased to 4.95% from 4.8%, with points decreasing to 0.67 from 0.76 for 80% LTV loans. 
  • The average contract interest rate for 5/1 ARMs increased to 4.67% from 4.60%, with points decreasing to 0.76 from 0.96 for 80% LTV loans.
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