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MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Calculated Risk on 4/06/2022 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 6.3 percent from one week
earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications
Survey for the week ending April 1, 2022.

… The Refinance Index decreased 10 percent from the previous
week and was 62 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent
compared with the previous week and was 9 percent lower than the same week one year ago.

“Mortgage application volume continues to decline due to rapidly rising mortgage rates, as financial
markets expect significantly tighter monetary policy in the coming months. The 30-year fixed mortgage
rate increased for the fourth consecutive week to 4.90 percent and is now more than 1.5 percentage
points higher than a year ago. As higher rates reduce the incentive to refinance, application volume
dropped to its lowest level since the spring of 2019. The refinance share of all applications dipped to 38.8
percent, down from 51 percent a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic
and Industry Forecasting. “The hot job market and rapid wage growth continue to support housing
demand, despite the surge in rates and swift home-price appreciation. However, insufficient for-sale
inventory is restraining purchase activity. Additionally, the elevated average purchase loan size, and
steeper 8 percent drop in FHA purchase applications, are both indicative of first-time buyers being
disproportionately impacted by supply and affordability challenges.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($647,200 or less) increased to 4.90 percent from 4.80 percent, with points decreasing to 0.53 from 0.56
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index has declined sharply over the last several months.
The refinance index is at the lowest level since March 2019.
The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 9% year-over-year unadjusted.

Note: Red is a four-week average (blue is weekly).

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