After five consecutive weeks of declines including to their lowest level in 28 years, mortgage applications increased this week, 2.3% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending August 25, 2023.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 2.3% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 1% compared with the previous week.
- The Refinance Index increased 3% from the previous week and was 28% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 2% from one week earlier.
- The unadjusted Purchase Index decreased 0.3% compared with the previous week and was 27% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 30.1% of total applications from 29.5% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 7.5% of total applications.
- The FHA share of total applications decreased to 13.2% from 14.3% the week prior.
- The VA share of total applications remained unchanged at 11.6% from the week prior. T
- he 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) remained unchanged at 7.31%, with points decreasing to 0.73 from 0.78 (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) increased to 7.28% from 7.27%, with points decreasing to 0.66 from 0.84 (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 increased to 7.10% from 7.09%, with points decreasing to 1.09 from 1.20 (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 remained unchanged at 6.72%, with points increasing to 1.11 from 1.06 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 6.48% from 6.50%, with points increasing to 1.20 from 1.03 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage rates were mostly unchanged last week, with the 30-year fixed rate remaining at 7.31%–the highest since December 2000. Treasury yields peaked early in the week and did move lower by the end, which may have spurred some activity,” said Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage applications for home purchases and refinances increased for the first time in five weeks but remained at low levels. Purchase applications increased but were still 27% lower than a year ago, as elevated mortgage rates and tight housing inventory continue to weigh on home buying activity.”
Added Kan, “The refinance market continues to be slow despite last week’s gain, which was driven by a 7.9% spike in conventional refinances. Government refinance applications dropped more than 10% last week.”
