Despite rising mortgage rates, mortgage applications increased 4.2% from one week earlier, according to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2022.
Here are the key points from the survey:
- The Market Composite Index, a measure of mortgage loan application volume, increased 4.2% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 3% compared with the previous week.
- The Refinance Index decreased 3% from the previous week and was 77% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 8% from one week earlier.
- The unadjusted Purchase Index increased 6% compared with the previous week and was 10% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 29.7% of total applications from 31.7% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 10.6% of total applications.
- The FHA share of total applications increased to 12.0% from 11.8% the week prior.
- The VA share of total applications decreased to 10.7% from 11.7% 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 ($647,200 or less) increased to 5.98% from 5.65%, with points increasing to 0.77 from 0.71 (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 $647,200) increased to 5.49% from 5.25%, with points decreasing to 0.45 from 0.54 (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 5.62% from 5.36%, with points increasing to 1.18 from 1.00 (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 5.05% from 4.79%, with points increasing to 0.86 from 0.80 (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 4.78% from 4.57%, with points increasing to 0.84 from 0.80 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
What the data means:
“Mortgage rates continued to surge last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98%—the highest since November 2008 and the largest single-week increase since 2009. All other loan types also increased by at least 20 basis points, influenced by the Federal Reserve’s 75-basis-point rate hike and commentary that more are coming to slow inflation,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Mortgage rates are now almost double what they were a year ago, leading to a 77% drop in refinance volume over the past 12 months.”
Added Kan, “Purchase applications increased for the second straight week—driven mainly by conventional applications—and the ARM share of applications jumped back to over 10%. However, purchase activity was still 10% lower than a year ago, as inventory shortages and higher mortgage rates are dampening demand. The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating.”
