Mortgage applications decreased another 1.2% from one week earlier, after a 2.3% decrease reported last week, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending August 19, 2022.
Here are this week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 3% compared with the previous week.
- The Refinance Index decreased 3% from the previous week and was 83% 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 21% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 31.1% of total applications from 31.2% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 6.5% of total applications.
- The FHA share of total applications increased to 12.5% from 12% the week prior.
- The VA share of total applications increased to 11.6% from 11.2% the week prior.
- The USDA share of total applications increased to 0.7% from 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 5.65% from 5.45%, with points increasing to 0.68 from 0.57 (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 5.28% from 5.14%, with points increasing to 0.58 from 0.33 (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 5.43% from 5.38%, with points increasing to 1.10 from 1.01 (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 5.01% from 4.87%, with points increasing to 0.84 from 0.64 (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 4.81% from 4.43%, with points increasing to 0.74 from 0.43 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
Expert’s take:
“Mortgage applications continued to remain at a 22-year low, held down by significantly reduced refinancing demand and weak home purchase activity. Last week’s purchase results varied, with conventional applications declining 2% and government applications increasing 4%, which is potentially a sign of more first-time homebuyer activity. The average purchase loan size continued to trend lower, as purchase activity at the high end of the market is weakening,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Mortgage rates increased for all loan types last week, with the benchmark 30-year fixed-rate jumping 20 basis points to 5.65%—the highest in nearly a month. The spread between conforming fixed-rate loans and ARM loans narrowed to 84 basis points from over 100 basis points the prior week. This movement made fixed-rate loans relatively more attractive than ARMs, thereby reducing the ARM share further from highs seen earlier this year.”
