The Mortgage Banker Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 11, 2023, shows a drop to levels not seen since February 2023. It’s the same old song: high interest rates.
“Treasury rates were elevated again last week following mixed data on inflation and more indication of resiliency in the economy, which may pose a challenge to the Federal Reserve’s efforts to lower inflation. The 30-year fixed mortgage rate increased for the third straight week, reaching 7.16%, matching October 2022’s rate and the highest rate since 2001,” said Joel Kan, MBA’s deputy chief economist.
The Market Composite Index, a mortgage loan application volume measure, decreased 0.8% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 2% compared with the previous week. The Refinance Index decreased 2% from the previous week and was 35% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased by 0.2% from one week earlier. The unadjusted Purchase Index decreased by 2% compared with the previous week and was 26% lower than the same week one year ago.
Kan further explained, “Overall applications decreased because of these higher rates, as both purchase and refinance applications ended the week at their lowest levels since February 2023. Government purchase applications provided a bright spot, increasing 2.4% over the week, driven by increases in both FHA and VA purchase categories. The ARM share of applications rose slightly to 7%, the highest since April 2023, as borrowers look for relief from higher fixed rates.”
The refinance share of mortgage activity decreased to 28.6% of total applications from 28.7% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.0% of total applications.
The FHA share of total applications increased to 13.8% from 13.6% the week prior. The VA share of total applications remained unchanged at 11.8% from the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.16% from 7.09%, with points decreasing to 0.68 from 0.70 (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 $726,200) increased to 7.11% from 7.04%, with points decreasing to 0.55 from 0.66 (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 decreased to 6.93% from 7.02%, with points increasing to 1.17 from 1.14 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 6.57% from 6.51%, with points increasing to 0.94 from 0.92 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs decreased to 6.20% from 6.36%, with points increasing to 1.45 from 1.20 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
