With mortgage rates at their highest in over a decade, mortgage applications decreased 5.0% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 15, 2022.
Key findings:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 5.0% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 4% compared with the previous week.
- The Refinance Index decreased 8% from the previous week and was 68% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 3% from one week earlier.
- The unadjusted Purchase Index decreased 2% compared with the previous week and was 14% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 35.7% of total applications from 37.1% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 8.5% of total applications.
- The share of total applications for:
- The FHA increased to 9.9% from 9.5% the week prior.
- The VA increased to 10.1% from 9.9% the week prior.
- The USDA remained unchanged at 0.5% from the week prior.
Average contract interest rate increases:
- 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.20% from 5.13%, with points increasing to 0.66 from 0.63 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
- 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 4.76% from 4.68%, with points increasing to 0.46 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- 30-year fixed-rate mortgages backed by the FHA increased to 5.11 percent from 4.95%, with points increasing to 0.90 from 0.75 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- 15-year fixed-rate mortgages increased to 4.44% from 4.34%, with points increasing to 0.77 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- 5/1 ARMs increased to 4.09% from 4.06%, with points decreasing to 0.56 from 0.68 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The takeaway:
“Ongoing concerns about rapid inflation and tighter U.S. monetary policy continued to push Treasury yields higher, driving mortgage rates to their highest level in over a decade,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Rates increased across the board for all loan types, with the 30-year fixed rate hitting 5.2%, the highest level since 2010. The 30-year rate has increased 70 basis points over the past month and is 2 full percentage points higher than a year ago. The recent surge in mortgage rates has shut most borrowers out of rate/term refinances, causing the refinance index to fall for the sixth consecutive week. In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pick up for this time of the year.”
“The ARM share of applications reached 8.5% last week, its highest level since 2019,” Kan added. “As ARM loans typically have lower rates than fixed rate mortgages, and as this spread has widened, ARM loans have become more attractive to borrowers already facing home purchase loan amounts close to record highs.”
