After four weeks of steady declines, mortgage applications increased 1.2% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending July 29, 2022.
Here is the weekly breakdown of the survey findings:
- The Market Composite Index, a measure of mortgage loan application volume, increased 1.2% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 1% compared with the previous week.
- The Refinance Index increased 2% from the previous week and was 82% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 1% from one week earlier.
- The unadjusted Purchase Index increased 1% compared with the previous week and was 16% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 30.8% of total applications from 30.7% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 8.4% of total applications.
- 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.
- 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.
The takeaway:
“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. “Treasury yields dropped as a result, as investors continue to expect a weaker macroeconomic environment in the coming months. The 30-year fixed rate saw the largest weekly decline since 2020, falling 31 basis points to 5.43%.
“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,” Kan added.
