Mortgage applications decreased for the fourth-straight week, down 1.8% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending July 22, 2022.
Here are the key stats from this week:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 1.8% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week.
- The Refinance Index decreased 4% from the previous week and was 83% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index decreased 0.4% compared with the previous week and was 18% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 30.7% of total applications from 31.4% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 9.1% of total applications.
- The FHA share of total applications decreased to 12.1% from 12.4% the week prior.
- The VA share of total applications remained unchanged at 10.6% from the week prior.
- The USDA share of total applications remained unchanged at 0.6% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.74% from 5.82%, with points decreasing to 0.61 from 0.65 (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) increased to 5.32% from 5.31%, with points increasing to 0.43 from 0.38 (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 5.54% from 5.50%, with points decreasing to 0.85 from 1.02 (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 increased to 4.95% from 4.88%, with points decreasing to 0.67 from 0.76 (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 4.67% from 4.60%, with points decreasing to 0.76 from 0.96 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The takeaway:
“Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic.
“Weakening purchase applications trends in recent months have been consistent with data showing a slowdown in sales for newly constructed homes and existing homes,” he continued. “A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year.”
Added Kan, “With mortgage rates remaining well over 5%, refinance applications are now 83% below last year’s pace.”
