In line with ongoing mortgage rate fluctuations, mortgage applications expectedly continued to follow suit this week decreasing 7.7% from one week earlier, when data showed a 7.4% increase after a previous dip before that. This is the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 10, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 7.7% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 7% compared with the previous week.
- The Refinance Index decreased 13% from the previous week and was 76% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 6% from one week earlier.
- The unadjusted Purchase Index decreased 5% compared with the previous week and was 43% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 32.0% of total applications from 33.9% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 6.9% of total applications.
- The FHA share of total applications increased to 12.6% from 11.9% the week prior.
- The VA share of total applications decreased to 12.6% from 13.4% 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) increased to 6.39% from 6.18%, with points increasing to 0.70 from 0.64 (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 $726,200) increased to 6.26% from 5.96%, with points decreasing to 0.43 from 0.55 (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 6.25% from 6.14%, with points increasing to 1.14 from 0.88 (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 5.85% from 5.64%, with points increasing to 0.81 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 decreased to 5.53% from 5.56%, with points decreasing to 0.72 from 0.80 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
MBA’s take:
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time. After five straight weeks of decreases, the 30-year fixed rate increased by 21 basis points to 6.39%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage applications decreased for the second time in three weeks because of these higher rates. Refinance borrowers, both rate/term and cash-out, remain on the sidelines as current rates provide little financial incentive to act.”
Added Kan, “Purchase applications dropped to their lowest level since the beginning of this year and were more than 40% lower than a year ago. Potential buyers remain quite sensitive to the current level of mortgage rates, which are more than two percentage points above last year’s levels and have significantly reduced buyers’ purchasing power.”
