Mortgage loan application volume fell 13.1% last week, continuing last week’s trend down, the Mortgage Bankers Association’s (MBA) weekly survey shows.
The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped 13.1%. The adjusted purchase index fell 10%, while the unadjusted purchase index fell 6% and was 6% lower YOY.
The refinance index fell 16% and was down 56% YOY. Refinances made up 50.1% of total applications.
“Mortgage applications dropped to their lowest level since December 2019 last week, as mortgage rates continued to inch higher. The 30-year fixed rate was 4.06%, almost a full percentage point higher than a year ago. Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022. Conventional refinances in particular saw a 17% decrease last week,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high.”
Mortgage rates hit 3.92% last week, their highest since May 2019, and are driving refinance applications down.
Black Knight recently noted that rising rates have “cut the pool of high-quality refinance candidates significantly.” The last time they rose this quickly in such a short period was during the “Taper Tantrum” of 2013.
The FHA share of total applications rose to 8.7% from 8.3%. The VA share of total applications rose to 9.9% from 9.3%, while the USDA share of total applications remained unchanged at 0.4%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose from 4.06% to 4.05%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances rose from 3.81% to 3.84%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to 4.09% from 4.01%.