Mortgage Applications Rose Last Week As Rates Fell: MBA – NMP Skip to main content

Mortgage Applications Rose Last Week As Rates Fell: MBA

David Krechevsky
Aug 03, 2022
Applications for home loans all but dried up, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Nov. 11

Applications increased 1.2% as mortgage rates fell the most since 2020.

Mortgage applications increased last week from a week earlier as mortgage rates fell, the Mortgage Bankers Association (MBA) said Wednesday.

According to the MBA’s Weekly Mortgage Applications Survey for the week ending July 29, the Market Composite Index, a measure of mortgage loan application volume, increased 1.2% on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index increased 1%.

The Refinance Index also rose, up 2% from the previous week, but it was still 82% below the same week last year. 

The seasonally adjusted Purchase Index increased 1% from a week earlier. Unadjusted, the Purchase Index increased 1%, but was 16% lower than the same week one year ago.

“Mortgage rates declined last week following another announcement of tighter monetary policy from the Federal Reserve, with the likelihood of more rate hikes to come,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting.

According to Freddie Mac’s weekly Primary Mortgage Market Survey report, released July 28, fixed mortgage rates dipped last week to 5.3% from 5.54% the previous week, the largest weekly decline since 2020.

“Treasury yields dropped as a result, as investors continue to expect a weaker macroeconomic environment in the coming months,” Kan said. “The drop in rates led to increases in both refinance and purchase applications, but compared to a year ago, activity is still depressed. Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity.”

A breakdown of mortgage activity from last week:

  • The refinance share of mortgage activity increased to 30.8% of total applications, up from 30.7% the previous week. 
  • The adjustable-rate mortgage (ARM) share of activity decreased to 8.4% of total applications, the MBA said.
  • The FHA share of total applications decreased to 11.9% from 12.1% the week prior. 
  • The VA share of total applications increased to 10.8% from 10.6% the week prior. 
  • The USDA share of total applications remained unchanged at 0.6% from the week prior.

A breakdown of average contract interest rates:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.43% from 5.74%, with points increasing to 0.65 from 0.61 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 5.06% from 5.32%, with points decreasing to 0.36 from 0.43 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 5.39% from 5.54%, with points increasing to 1.03 from 0.85 (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 decreased to 4.74% from 4.95%, with points decreasing to 0.65 from 0.67 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 5/1 ARMs decreased to 4.55% from 4.67%, with points decreasing to 0.69 from 0.76 (including the origination fee) for 80% LTV loans. The effective rate decreased 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. Base period and value for all indexes is March 16, 1990=100.

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