A downward trend in mortgage applications changed course this week. According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 4, 2022, Mortgage applications increased 8.5% from one week earlier.
Key findings:
- On an unadjusted basis, the Index increased 10% compared with the previous week, rising from 480.9 to 528.99.
- The Refinance Index increased 9% from the previous week and was 50% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 9% from one week earlier.
- The unadjusted Purchase Index increased 11% compared with the previous week and was 7% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 49.5% of total applications from 49.9% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.2% of total applications.
- The FHA share of total applications increased to 8.7% from 8.6% the week prior. ‘
- The VA share of total applications increased to 10.4% from 10.2% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 4.09% from 4.15%, with points remaining unchanged at 0.44 (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 $647,200) decreased to 3.79% from 3.88%, with points decreasing to 0.39 from 0.40 (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 4.12% from 4.15%, with points decreasing to 0.73 from 0.74 (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 3.39% from 3.47%, with points decreasing to 0.46 from 0.47 (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 3.38% from 3.44%, with points decreasing to 0.28 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The takeaway
“Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower. A 6-basis-point decline in the 30-year fixed-rate mortgage led to a slight rebound in total refinance activity, with a larger gain in government refinances. Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Purchase activity also increased, as prospective buyers acted on lower rates and the early start of the spring buying season. The average loan size remained close to record highs, with higher-balance loan applications continuing to dominate growth.”
