Mortgage applications increased another 2.2% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA), for the week ending November 18, 2022. Last week’s results include an adjustment for the observance of Veterans Day.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 2.2% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 10% compared with the previous week.
- The Refinance Index increased 2% from the previous week and was 86% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 3% from one week earlier.
- The unadjusted Purchase Index increased 9% compared with the previous week and was 41% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 28.4% of total applications from 27.6% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 8.8% of total applications.
- The FHA share of total applications decreased to 13.4% from 13.5% the week prior.
- The VA share of total applications decreased to 10.5% from 10.6% 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 6.67% from 6.90%, with points increasing to 0.68 from 0.56 (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 6.30% from 6.51%, with points increasing to 0.74 from 0.64 (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 6.66% from 6.93%, with points increasing to 1.01 from 0.99 (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 6.08% from 6.27%, with points decreasing to 0.70 from 0.73 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 5.78% from 5.73%, with points increasing to 0.73 from 0.65 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
Kan’s take:
“The 30-year fixed-rate mortgage fell for the second week in a row to 6.67% and is now down almost 50 basis points from the recent peak of 7.16% one month ago,” said Joel Kan, MBA’s vice president and deputy chief economist. “The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year. As a result of the drop in mortgage rates, both purchase and refinance applications picked up slightly last week. However, refinance activity is still more than 80% below last year’s pace.”
Added Kan, “With the decline in rates, the ARM share of applications also decreased to 8.8% of loans last week, down from the range of 10 and 12% during the past two months.”
