Mortgage applications increased 0.9% this week from last week’s decrease of 4.4%, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending July 7, 2023. This week’s results include an adjustment for the observance of Independence Day.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 0.9% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 19% compared with the previous week.
- The Refinance Index decreased 1% from the previous week and was 39% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 2% from one week earlier.
- The unadjusted Purchase Index decreased 19% compared with the previous week and was 26% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 26.8% of total applications from 27.4% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 6.6% of total applications.
- The FHA share of total applications increased to 13.3% from 13.0% the week prior.
- The VA share of total applications increased to 12.6% from 11.7% the week prior.
- The USDA share of total applications remained unchanged at 0.4% 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 7.07% from 6.85%, with points increasing to 0.74 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 $726,200) increased to 7.04% from 6.95%, with points decreasing to 0.59 from 0.64 (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 6.86% from 6.68%, with points increasing to 1.23 from 0.98 (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 6.42% from 6.30%, with points increasing to 1.22 from 0.91 (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 6.24% from 6.00%, with points increasing to 1.42 from 1.23 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Incoming economic data continue to send mixed signals about the economy, with the overall impact leaving Treasury yields higher last week as markets expect that the Federal Reserve will need to hold rates higher for longer to slow inflation. All mortgage rates in our survey followed suit, with the 30-year fixed rate increasing to 7.07%, the highest level since November 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “The jumbo rate also increased to 7.04%, a record high for the jumbo series, which dates back to 2011.”
Added Kan, “Purchase applications increased, but remained at a very low level and are 26% lower than the same week last year. The rise in purchase activity was driven by increases in both FHA and VA purchase applications. The refinance index dropped to its lowest level since early June, as demand for rate/term and cash-out refinances remains extremely low with mortgage rates over 7%.”
