Mortgage applications decreased for the third-straight week, down another 3.1% from last week’s 3.0% dip, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending August 4, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 3.1% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index decreased 4% compared with the previous week.
- The Refinance Index decreased 4% from the previous week and was 37% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 3% from one week earlier.
- The unadjusted Purchase Index decreased 3% compared with the previous week and was 27% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 28.7% of total applications from 28.9% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 6.9% of total applications.
- The FHA share of total applications increased to 13.6% from 13.3% the week prior.
- The VA share of total applications increased to 11.8% from 11.6% the week prior.
- The USDA share of total applications decreased to 0.4% from 0.7% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.09% from 6.93%, with points increasing to 0.70 from 0.68 (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 $726,200) increased to 7.04% from 6.89%, with points increasing to 0.66 from 0.58 (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 7.02% from 6.85%, with points increasing to 1.14 from 1.05 (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 6.51% from 6.39%, with points increasing to 0.92 from 0.78 (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 6.36% from 6.18%, with points increasing to 1.2 from 1.16 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Treasury yields rates rose last week and mortgage rates followed suit due to a combination of the Treasury’s funding announcement and the downgrading of the U.S. government debt rating. Rates increased for all loan types in our survey, with the 30-year fixed mortgage rate increasing to 7.09%, the highest level since November 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “Additionally, the rate for FHA mortgages increased to 7.02%, the highest rate since 2002. Not surprisingly, mortgage applications continued to decline given these higher rates, with overall application counts falling for the third consecutive week, as both purchase and refinance activity declined. The purchase index fell for the fourth consecutive week, as homebuyers continue to struggle with low for-sale inventory and elevated mortgage rates.”
