Applications Drop To Lowest Level Since December 2018

Mortgage loan application volume dropped another 2.3%, the fourth decrease in five weeks and the lowest level since December 2018, the Mortgage Bankers Association’s (MBA) weekly survey shows.

The adjusted Market Composite Index, a measure of mortgage loan application volume, fell by 2.3%. The adjusted purchase index fell 1%, while the unadjusted purchase index fell by 2% and was 14% lower YOY.

The refinance index fell 5% and was down 75% YOY. Refinances made up 31.5% of total applications.

ARM activity fell to 8.7% of total applications. 

“With the 30-year fixed rate at 5.33%, the refinance market continues to shrink, led by larger decreases last week for FHA and VA refinance applications. The refinance index was 75% below last year’s level, when rates were more than 200 basis points lower,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.

“Purchase applications last week were 14% lower than last year, with more activity in the larger loan sizes. Demand is high at the upper end of the market, and supply and affordability challenges are not as detrimental to these borrowers as they are to first-time buyers.”

The FHA share of total applications fell to 10.8% from 11.3%. The VA share of total applications fell to 10.2% from 10.4%, while the USDA share remained unchanged at 0.5%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased from 5.46% to 5.33%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances also fell from 5.02% to 4.93%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose from 5.36% to 5.20%, and for 5/1 ARMs fell from 4.49% to 4.46%.