Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2022.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 77 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 10 percent lower than the same week one year ago.

“Mortgage rates continued to surge last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98 percent – the highest since November 2008 and the largest single-week increase since 2009. All other loan types also increased by at least 20 basis points, influenced by the Federal Reserve’s 75-basis-point rate hike and commentary that more are coming to slow inflation,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Mortgage rates are now almost double what they were a year ago, leading to a 77 percent drop in refinance volume over the past 12 months.”

Added Kan, “Purchase applications increased for the second straight week – driven mainly by conventional applications – and the ARM share of applications jumped back to over 10 percent. However, purchase activity was still 10 percent lower than a year ago, as inventory shortages and higher mortgage rates are dampening demand. The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating.”

The refinance share of mortgage activity decreased to 29.7 percent of total applications from 31.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 10.6 percent of total applications.

The FHA share of total applications increased to 12.0 percent from 11.8 percent the week prior. The VA share of total applications decreased to 10.7 percent from 11.7 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.98 percent from 5.65 percent, with points increasing to 0.77 from 0.71 (including the origination fee) for 80 percent 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 5.49 percent from 5.25 percent, with points decreasing to 0.45 from 0.54 (including the origination fee) for 80 percent 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 5.62 percent from 5.36 percent, with points increasing to 1.18 from 1.00 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.05 percent from 4.79 percent, with points increasing to 0.86 from 0.80 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 4.78 percent from 4.57 percent, with points increasing to 0.84 from 0.80 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.