Mortgage applications decreased 6.5% from one week earlier, according to the latest data from the Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending June 3, 2022, released Wednesday. This week’s results include an adjustment for the Memorial Day holiday, MBA reported.
Key findings:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 6.5% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 17% compared with the previous week.
- The Refinance Index decreased 6% from the previous week and was 75% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 7% from one week earlier. The unadjusted Purchase Index decreased 18% compared with the previous week and was 21% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 32.2% of total applications from 31.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.2% of total applications.
- The FHA share of total applications increased to 11.3% from 10.8% the week prior. The VA share of total applications increased to 11.4% from 10.2% the week prior. The USDA share of total applications remained unchanged at 0.5% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.40% from 5.33%, with points increasing to 0.60 from 0.51 (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 4.99% from 4.93%, with points increasing to 0.44 from 0.41 (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 5.30% from 5.20%, with points increasing to 0.79 from 0.69 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 4.62% from 4.59%, with points increasing to 0.65 from 0.63 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs increased to 4.51% from 4.46%, with points remaining at 0.68 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The takeaway:
“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “The 30-year fixed rate increased to 5.4% after three consecutive declines. While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week. The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months. These worsening affordability challenges have been particularly hard on prospective first-time buyers.”
