Mortgage loan application volume fell 1.2% last week, the Mortgage Bankers Association’s (MBA) weekly survey shows.
The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped 1.2%. The adjusted purchase index fell 1%, while the unadjusted purchase index fell 2% and was 8% lower YOY.
The refinance index fell 3% and was down 49% YOY. Refinances made up 48.4% of total applications.
Rising mortgage rates continue to impact application activity. Rates reached 4.27% last week, their highest since May 2019, and are adding to investor uncertainty.
They’re also having an outsized impact on refis, which declined for both conventional and government loans. Refinances bounced up last week due to a brief drop in rates, though it was short-lived.
“Investors are weighing the impacts of rapidly increasing inflation in the U.S. and many other parts of the world against the potential for a slowdown in economic growth due to a renewed bout of supply-chain constraints,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The Consumer Price Index rose 7.9% in the year through February, the fastest pace of annual inflation in 40 years, while retail sales data shows prices are deterring many Americans from spending even as their wages are increasing.
“Purchase applications slightly increased, with both conventional and VA loan applications seeing gains. The average purchase application loan size remained elevated at $453,200 – the second-highest amount in MBA’s survey,” Kan said.
The FHA share of total applications remained unchanged at 8.7%. The VA share of total applications rose to 10.5% from 10.4%, while the USDA share of total applications remained unchanged at 0.5%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose from 4.09% to 4.27%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances rose from 3.39% to 4.02%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose from 4.12% to 4.23%.