For the third straight week, and the fourth time in five weeks, mortgage application volume fell from a week earlier, the Mortgage Bankers Association (MBA) said Wednesday.
According to the MBA’s Weekly Mortgage Applications Survey for the week ended Feb. 24, the Market Composite Index — a measure of mortgage loan application volume — decreased 5.7% on a seasonally adjusted basis from a week earlier.
On an unadjusted basis, the index decreased 4% from the previous week. In addition, both the purchase and refinance indexes fell from a week earlier:
- The Refinance Index decreased 6% from the previous week and was 74% lower than the same week one year ago.
- The seasonally adjusted Purchase Index also decreased 6% from a week earlier. Unadjusted, the Purchase Index decreased 3% compared with the previous week and was 44% lower than the same week one year ago.
Joel Kan, the MBA’s vice president and deputy chief economist, said increased mortgage rates drove the decline in applications.
“The 30-year fixed rate increased to 6.71% last week, the highest rate since November 2022, which drove a 6% drop in applications,” he said. “After a brief revival in application activity in January, when mortgage rates dropped down to 6.2%, there has now been three straight weeks of declines in applications as mortgage rates have jumped 50 basis points over the past month.”
“Data on inflation, employment, and economic activity have signaled that inflation may not be cooling as quickly as anticipated, which continues to put upward pressure on rates,” Kan said.
“Both purchase and refinance applications declined last week, with purchase index at a 28-year low for a second consecutive week,” he continued. “Purchase applications were 44% lower than a year ago, as homebuyers again retreat to the sidelines as higher rates crimp affordability. Refinance applications account for less than a third of all applications and remained more than 70% behind last year’s pace, as a majority of homeowners are already locked into lower rates.”
The refinance share of mortgage activity decreased to 31.8% of total applications from 32.5% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.1% of total applications.
The FHA share of total applications remained unchanged from the previous week at 12.1%. The VA share of total applications decreased to 11.6% from 12% the previous week. The USDA share of total applications dipped to 0.5% from 0.6%, where it had 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 6.71% from 6.62%, with points increasing to 0.77 from 0.75. 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) remained at 6.44%, with points decreasing to 0.49 from 0.53. The effective rate remained the same from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.45% from 6.39%, with points increasing to 1.19 from 1.16. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.13 percent from 5.98%, with points remaining at 0.93. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs increased to 5.73% from 5.66%, with points decreasing to 0.86 from 0.97. The effective rate increased from last week.
The 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.
