Home purchase volume saw an increase this week, following a 4.1% drop in activity last week, likely due to lessening mortgage rates occurring recently.
Mortgage applications increased 5.3% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 7, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 5.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index increased 6% compared with the previous week.
- The Refinance Index increased 0.1% from the previous week and was 57% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 8% from one week earlier. The unadjusted index increased 9% compared with the previous week and was 31% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 27% of total applications from 28.6% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 6% of total applications.
- The FHA share of total applications increased to 12.3% from 12% the week prior.
- The VA share of total applications increased to 12.8% from 11% the week prior.
- The USDA share of total applications decreased to 0.5% from 0.6% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.3% from 6.4%, with points decreasing to 0.55 from 0.59 (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 6.26% from 6.36%, with points decreasing to 0.42 from 0.47 (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 6.29% from 6.33%, with points decreasing to 0.91 from 0.92 (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 5.78% from 5.97%, with points increasing to 0.57 from 0.54 (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 5.51% from 5.61%, with points decreasing to 0.9 from 1.02 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The takeaways:
“Incoming data last week showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.3%—the lowest level in two months,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Prospective homebuyers this year have been quite sensitive to any drop in mortgage rates, and that played out last week with purchase applications increasing by 8%. Refinance application volume was a mixed bag with total volume essentially flat, conventional volume down for the week, but VA refinance volume increasing. The level of refinance activity remains almost 60% below last year, as most homeowners are currently locked in at much lower rates.”
