For the third time in four weeks, the volume of mortgage applications fell from the previous week as mortgage rates rose again, the Mortgage Bankers Association (MBA) said Wednesday.
According to data from the MBA’s Weekly Mortgage Applications Survey for the week ended Feb. 17, the Market Composite Index — a measure of mortgage loan application volume — decreased 13.3% on a seasonally adjusted basis from the previous week.
Unadjusted, the index decreased 4% from the previous week.
The Refinance Index decreased 2% from the previous week and was 72% lower than the same week one year ago, the survey found.
The seasonally adjusted Purchase Index decreased 18% from one week earlier. Unadjusted, the Purchase Index decreased 4% from the previous week and was 41% below the level a year earlier.
“Mortgage rates increased across all loan types last week, with the 30-year fixed rate jumping 23 basis points to 6.62% — the highest rate since November 2022,” said Joel Kan, vice president and deputy chief economist for the MBA. “The jump led to the purchase applications index decreasing 18% to its lowest level since 1995.”
Kan said purchase activity typically increases at this time of year, “but over the past two weeks, [mortgage] rates have increased significantly as financial markets digest data on inflation cooling at a slower pace than expected. The increase in mortgage rates has put many homebuyers back on the sidelines once again, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates.”
He added, “Refinance applications declined last week and remained more than 70% behind last year’s pace. Given that rates are over 2.5 percentage points higher than a year ago, we expect that refinance activity will remain depressed for some time.”
The refinance share of mortgage activity increased to 32.5% of total applications from 32% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.6% of total applications.
The FHA share of total applications decreased to 12.1% from 12.6% the week prior, while the VA share of total applications decreased to 12% from 12.6% the week prior. The USDA share of total applications remained unchanged at 0.6%, where it has been since the start of the year.
Mortgage Rates
Note: The points listed include the origination fee and are for 80% loan-to-value ratio loans.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.62% from 6.39%, with points increasing to 0.75 from 0.70. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.44% from 6.26%, with points increasing to 0.53 from 0.43. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.39% from 6.25%, with points increasing to 1.16 from 1.14. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 5.98% from 5.85%, with points increasing to 0.93 from 0.81. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs increased to 5.66% from 5.53%, with points increasing to 0.97 from 0.72. 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. Base period and value for all indexes is March 16, 1990=100.
