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MARKET UPDATE

Mortgage Applications Increase for the First Time in Six Weeks

After six weeks of declines, mortgage applications increased this week, up 3.8% from last week’s 0.8% dip, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending September 16, 2022. Last week’s results include an adjustment for the Labor Day holiday.

After six weeks of declines, mortgage applications increased this week, up 3.8% from last week’s 0.8% dip, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending September 16, 2022. Last week’s results include an adjustment for the Labor Day holiday.

This week’s key findings:

  • The Market Composite Index, a measure of mortgage loan application volume, increased 3.8% on a seasonally adjusted basis from one week earlier.
  • On an unadjusted basis, the Index increased 14% compared with the previous week.
  • The Refinance Index increased 10% from the previous week and was 83% lower than the same week one year ago.
  • The seasonally adjusted Purchase Index increased 1% from one week earlier.
  • The unadjusted Purchase Index increased 11% compared with the previous week and was 30% lower than the same week one year ago.
  • The refinance share of mortgage activity increased to 32.5% of total applications from 30.2% the previous week.
  • The adjustable-rate mortgage (ARM) share of activity remained unchanged at 9.1% of total applications.
  • The FHA share of total applications decreased to 13.3% from 13.4% the week prior.
  • The VA share of total applications decreased to 10.9% from 11.3% the week prior.
  • The USDA share of total applications decreased to 0.6% from 0.7% the week prior.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.25% from 6.01%, with points decreasing to 0.71 from 0.76 (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 $647,200) increased to 5.79% from 5.56%, with points increasing to 0.46 from 0.39 (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 5.85% from 5.71%, with points increasing to 1.15 from 1.12 (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 5.40% from 5.30%, with points increasing to 1.06 from 0.89 (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 5.14% from 4.83%, with points increasing to 0.99 from 0.52 (including the origination fee) for 80% LTV loans. The effective rate increased from last week. 

The takeaway:

“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce – in their efforts to slow inflation—another sizable short-term rate hike. Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25%—the highest since October 2008,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels, with purchase applications 30% lower and refinance activity down 83%. The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”