Mortgage applications decreased 1.4% this week, down from a 3.7% decrease the previous week and reaching its fourth-straight week of dips, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending June 2, 2023. This week’s results include an adjustment for the Memorial Day holiday.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 1.4% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 12% compared with the previous week.
- The Refinance Index decreased 1% from the previous week and was 42% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 2% from one week earlier.
- The unadjusted Purchase Index decreased 13% compared with the previous week and was 27% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 27.3% of total applications from 26.7% the previous week.
- The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.8% of total applications.
- The FHA share of total applications increased to 13.2% from 12.7% the week prior.
- The VA share of total applications increased to 12.5% from 12.1% the week prior.
- The USDA share of total applications decreased to 0.4% from 0.5% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.81% from 6.91%, with points decreasing to 0.66 from 0.83 (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 $726,200) decreased to 6.74% from 6.78%, with points decreasing to 0.56 from 0.76 (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 6.73% from 6.85%, with points decreasing to 1.15 from 1.26 (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 6.25% from 6.41%, with points decreasing to 0.62 from 0.84 (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 5.93% from 5.39%, with points increasing to 0.96 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage rates declined last week from a recent high, but total application activity slipped for the fourth straight week. The 30-year fixed rate dipped to 6.81%, 10 basis points lower than last week but still the second highest rate of 2023,” said Joel Kan, MBA’s vice president and deputy chief economist. “Overall applications were more than 30% lower than a year ago, as borrowers continue to grapple with the higher-rate environment. Purchase activity is constrained by reduced purchasing power from higher rates and the ongoing lack of for-sale inventory in the market, while there continues to be very little rate incentive for refinance borrowers. There was less of a decline in government purchase applications last week, which was consistent with a growing share of first-time home buyers in the market.”
