With mortgage rates rising due to higher oil prices from geopolitical tensions in the Middle East, mortgage applications saw another fall this week, according to data from the Mortgage Bankers Association.
MBA’s Weekly Mortgage Applications Survey found that the Market Composite Index (a measure of mortgage loan application volume) fell 10.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index fell 10% compared with the previous week.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, noted that the “threat of higher for longer oil prices continued to keep Treasury yields elevated, and mortgage rates finished last week higher.”
The Purchase Index also fell this week, down 5% on both a seasonally adjusted and unadjusted basis and 5% compared with the previous week. Despite the fall, however, the Index was 5% higher than the same week one year ago.
The Refinance Index, which notably held strong for weeks on end throughout mortgage market challenges, also saw a large fall of 15% from the previous week. The Index continues to persevere year-over-year, however, as it was 52% higher than the same week one year ago. The refinance share of mortgage activity also saw a slip from 52.3% of total applications the previous week to 49.6%.
“Given this period of increasing mortgage rates and diminishing refinance incentives, refinance applications decreased 15 percent as applications across all loan types declined,” added Kan. “Purchase applications were also down last week, as higher mortgage rates, coupled with affordability constraints and economic uncertainty, pushed some potential homebuyers to the sidelines.”
As for other shares of activity, the adjustable-rate mortgage (ARM) share of activity increased to 8.1% of total applications. The FHA share of total applications increased to 19.7% from 19.4% the week prior. The VA share of total applications decreased to 15.9% from 16.7% the week prior. The USDA share of total applications increased to 0.5% from 0.4% the week prior.
