The volume of mortgage applications continued their upward trend last week, rising for the sixth time in seven weeks, the Mortgage Bankers Association (MBA) said Wednesday.
The Market Composite Index — a measure of mortgage loan application volume — increased 3.7% on a seasonally adjusted basis from a week earlier, according to data from the MBA’s Weekly Mortgage Applications Survey for the week ending April 21, 2023.
Unadjusted, the Composite Index increased 5% from the previous week.
The Refinance Index increased 2% from the previous week, but was still 51% lower than the same week last year.
The seasonally adjusted Purchase Index increased 5% from a week earlier. Unadjusted, the Purchase Index increased 6% from the previous week but was 28% lower at the same point last year.
High Rates, Low Supply
“Both conventional and government home purchase applications increased last week,” said Joel Kan, MBA’s vice president and deputy chief economist. “However, activity was still nearly 28% below last year’s pace, as high mortgage rates and low supply have slowed the market this year, even as home-price growth has decelerated in many markets across the country.”
Kan noted that refi applications also increased last week, but remained at half of last year’s levels.
Watch The Interest
“Although incoming data points to a slowdown in the U.S. economy, markets continue to expect that the [Federal Reserve] will raise short-term rates at its next meeting, which have pushed Treasury yields somewhat higher,” he said. “As a result of the higher yields, mortgage rates increased for the second straight week to their highest level in over a month, with the 30-year fixed rate now at 6.55%.”
The refinance share of mortgage activity decreased to 26.8% of total applications from 27.6% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7% of total applications.
The FHA share of total applications slipped to 12.6% from 12.7% the previous week. The VA share of total applications decreased to 11.2% from 11.7% the previous week, while the USDA share of total applications dipped to 0.4% from 0.5% the week prior.
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 6.55% from 6.43%, with points remaining at 0.63. 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 6.4% from 6.28%, with points decreasing to 0.5 from 0.51. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.41% from 6.33%, with points increasing to 1.04 from 0.94. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.03% from 5.89%, with points decreasing to 0.56 from 0.65. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 5.47% from 5.56%, with points increasing to 1.18 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. The base period and value for all indexes is March 16, 1990=100.
