After a brief dip reported a week ago, mortgage applications increased this week 7.4% from a 9.0% decrease one week earlier, according to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 3, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 7.4% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 8% compared with the previous week.
- The Refinance Index increased 18% from the previous week and was 75% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 3% from one week earlier.
- The unadjusted Purchase Index increased 4% compared with the previous week and was 37% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 33.9% of total applications from 31.2% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 6.6% of total applications.
- The FHA share of total applications decreased to 11.9% from 12.0% the week prior.
- The VA share of total applications increased to 13.4% from 11.9% 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 ($726,200 or less) decreased to 6.18% from 6.19%, with points decreasing to 0.64 from 0.65 (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 $726,200) decreased to 5.96% from 5.99%, with points increasing to 0.55 from 0.48 (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 6.14% from 6.18%, with points decreasing to 0.88 from 0.99 (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 increased to 5.64% from 5.50%, with points decreasing to 0.63 from 0.73 (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 5.56% from 5.38%, with points decreasing to 0.80 from 0.83 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Applications rose last week as the 30-year fixed mortgage rate inched lower to 6.18%, its fifth consecutive weekly decline. The 30-year fixed rate is almost a%age point below its recent high of 7.16% in October 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “Both purchase and refinance applications increased last week and have shown gains in three of the past four weeks because of lower rates. Overall applications remained 58% lower than a year ago and rates are still significantly higher, however, this week’s results are a step in the right direction. Purchase activity that was put on hold last year due to the quick runup in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market.”
Added Kan, “The average loan size on a purchase application increased to $428,500–the largest average since May 2022. This increase is a sign that the recent upward trend in purchase activity remains skewed toward larger loan sizes and less first-time homebuyer activity, as entry-level housing remains undersupplied, and buyers struggle with affordability in many markets.”
