As some mortgage rates climbed above 7% for the first time since November, mortgage applications fell for the third straight week, the Mortgage Bankers Association (MBA) said Wednesday.
According to data from the MBA’s Weekly Mortgage Applications Survey for the week ended May 26, the Market Composite Index — a measure of mortgage loan application volume — decreased 3.7% on a seasonally adjusted basis from a week earlier. Unadjusted, the index fell 5% from the previous week.
The Refinance Index dropped 7% from the previous week and was 45% lower than the same week last year, the MBA said.
The seasonally adjusted Purchase Index decreased 3% from a week earlier. Unadjusted, the Purchase Index decreased 4% from a week earlier and was 31% lower than the same week last year.
"Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon,” said Mike Fratantoni, MBA’s SVP and chief economist. “Mortgage rates for conforming-balance, 30-year loans were being quoted above 7% by some lenders last week, and the weekly average at 6.9% reached the highest level since last November.”
Fratantoni added that application volumes for both purchase and refinance loans decreased last week because of the higher rates. “While refinance demand is almost entirely driven by the level of rates, purchase volume continues to be constrained by the lack of homes on the market,” he said.
The refinance share of mortgage activity decreased to 26.7% of total applications from 27.4% the previous week, the MBA said. The adjustable-rate mortgage (ARM) share of activity increased to 6.8% of total applications.
The FHA share of total applications ticked up to 12.7% from 12.5% a week earlier. The VA share of total applications decreased to 12.1% from 12.5% the previous week. The USDA share of total applications remained unchanged at 0.5% from the previous week..
Mortgage Rates
Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.91% from 6.69%, with points increasing to 0.83 from 0.66. 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 6.78% from 6.57%, with points increasing to 0.76 from 0.57. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.85% from 6.56%, with points increasing to 1.26 from 1.24. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.41% from 6.15%, with points increasing to 0.84 from 0.72. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 5.39% from 5.73%, with points decreasing to 0.46 from 1.19. The effective rate decreased 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. Base period and value for all indexes is March 16, 1990=100.
