Even with mortgage rates rising above 7%, the weekly volume of mortgage applications increased for the third straight time last week, the Mortgage Bankers Association (MBA) said Wednesday.
According to the MBA’s Weekly Mortgage Applications Survey for the week ended July 7, the Market Composite Index — a measure of mortgage loan application volume — increased 0.9% on a seasonally adjusted basis from a week earlier. The results include an adjustment for the observance of Independence Day.
Unadjusted, the index decreased 19% from the previous week.
The increase was driven by purchase applications, with the seasonally adjusted Purchase Index rising 2% from a week earlier. Unadjusted, the Purchase Index decreased 19% from the previous week and was 26% lower than the same week last year.
The Refinance Index decreased 1% from the previous week and was 39% lower than a year earlier.
Mixed Signals
“Incoming economic data continue to send mixed signals about the economy, with the overall impact leaving Treasury yields higher last week as markets expect that the Federal Reserve will need to hold rates higher for longer to slow inflation,” said Joel Kan, MBA’s deputy chief economist. “All mortgage rates in our survey followed suit, with the 30-year fixed rate increasing to 7.07%, the highest level since November 2022.”
The jumbo rate also rose above 7%, reaching 7.04%, a record high for the jumbo series, which dates back to 2011, Kan said.
“Purchase applications increased but remained at a very low level and are 26% lower than the same week last year,” he added. “The rise in purchase activity was driven by increases in both FHA and VA purchase applications. The refinance index dropped to its lowest level since early June, as demand for rate/term and cash-out refinances remains extremely low with mortgage rates over 7%.”
The refinance share of mortgage activity decreased to 26.8% of total applications from 27.4% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.6% of total applications.
The FHA share of total applications increased to 13.3% from 13% a week earlier. The VA share of total applications increased to 12.6% from 11.7% the previous week. The USDA share of total applications remained unchanged at 0.4%.
Mortgage Rates
Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans. The effective rates for each loan type increased from a week earlier.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.07% from 6.85%, with points increasing to 0.74 from 0.65.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 7.04% from 6.95%, with points decreasing to 0.59 from 0.64.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.86% from 6.68%, with points increasing to 1.23 from 0.98.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.42 percent from 6.3%, with points increasing to 1.22 from 0.91.
- The average contract interest rate for 5/1 ARMs increased to 6.24% from 6%, with points increasing to 1.42 from 1.23.
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.
