For the second straight week, mortgage applications increased, up 0.2% from one week earlier, according to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 5, 2022, released Wednesday. Data shows that while there was a decline in purchases, an uptick in refinances edged the overall increase.
Additional key findings from the survey:
- The Market Composite Index, a measure of mortgage loan application volume, increased 0.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.3% compared with the previous week.
- The Refinance Index increased 4% from the previous week and was 82% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 1% from one week earlier.
- The unadjusted Purchase Index decreased 2% compared with the previous week and was 19% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 32.0% of total applications from 30.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.4% of total applications.
- The FHA share of total applications increased to 12.1% from 11.9% the week prior.
- The VA share of total applications increased to 10.9% from 10.8% the week prior.
- The USDA share of total applications remained unchanged at 0.6% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.47% from 5.43%, with points increasing to 0.80 from 0.65 (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 5.09% from 5.06%, with points increasing to 0.59 from 0.36 (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 decreased to 5.35% from 5.39%, with points decreasing to 1.02 from 1.03 (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 remained at 4.74%, with points decreasing to 0.62 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 4.60% from 4.55%, with points decreasing to 0.63 from 0.69 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The takeaway:
“Mortgage rates remained volatile last week—after drops in the previous two weeks, mortgage rates ended up rising four basis points. Mortgage applications were relatively flat, with a decline in purchase activity offset by an increase in refinance applications,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “The purchase market continues to experience a slowdown, despite the strong job market. Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubts about the strength of the economy.”
Added Kan, “Refinance applications increased over 3% but remained more than 80% lower than a year ago in this higher rate environment.”
