Mortgage applications fell to a more than two-year low last week, according to a weekly report from the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, decreased 13.1% on a seasonally adjusted basis from a week earlier, the MBA said.
On an unadjusted basis, the index decreased 11% compared with the previous week. The refinance index decreased 16% from the previous week and was 56% lower than the same week one year ago, according to the MBA. The seasonally adjusted purchase index decreased 10% from a week earlier, and the unadjusted purchase index decreased 6% compared with the previous week and was 6% lower than the same week one year ago.
"Mortgage applications dropped to their lowest level since December 2019 last week, as mortgage rates continued to inch higher. The 30-year fixed rate was 4.06%, almost a full percentage point higher than a year ago. Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022. Conventional refinances in particular saw a 17% decrease last week," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey's record high."
The refinance share of mortgage activity decreased to 50.1% of total applications from 52.8% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.1% of total applications.
The FHA share of total applications increased to 8.7% from 8.3% the week prior. The VA share of total applications increased to 9.9% from 9.3% 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 ($647,200 or less) increased to 4.06% from 4.05%, with points increasing to 0.48 from 0.45 (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 $647,200) increased to 3.84% from 3.81%, with points increasing to 0.45 from 0.39 (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 increased to 4.09 percent from 4.01%, with points decreasing to 0.56 from 0.59 (including the origination fee) for 80% LTV (loan-to-value) loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.42% from 3.37%, with points decreasing to 0.45 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs (adjustable rate mortgages) decreased to 3.26% from 3.36%, with points decreasing to 0.34 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
