Mortgage loan application volume fell 1.1% last week, the Mortgage Bankers Association’s (MBA) weekly survey reports. Interest rate spikes stopped the upward momentum of applications seen in last week’s survey.
The Market Composite Index, which measures application volume, fell 1.1% on an adjusted basis. On the same basis, they fell 1% from the week before, which is 13% lower year over year. The share of refinancing applications fell 1% and was 0.4% higher compared to a year ago.
The seasonally adjusted Purchase Index fell 1%, while the unadjusted Purchase Index fell 2% compared to the week before, down 12% from the previous year.
“Increased optimism about the strength of the economy pushed Treasury yields higher following last week’s FOMC meeting. Mortgage rates in response rose across all loan types, with the benchmark 30-year fixed-rate reaching its highest level since early July 2021,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“The increase in rates – mostly later in the week – led to a decrease in both purchase and refinance applications, with a noticeable decline in government loan applications. Conventional loan applications increased, driven by a rise in conventional refinances. This was perhaps a sign that some borrowers reacted to higher rates and decided to refinance.”
“With home-price appreciation continuing to run hot, increasing more than 19 percent annually in July, applications for larger loan amounts continue to outpace lower-balance loans. The average loan size for a purchase application reached $410,000, its highest level since May 2021,” he added.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.10%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances increased to 3.14% from 3.11%
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.09% from 3.07%.
Here are some highlights from the survey:
- Refinance share of mortgage activity: 66.4% (+0.2%)
- FHA share of total applications: 10.4% (-1.1%)
- VA share: 10.2% (-0.2%)
- USDA share: 0.4% (-0.1%)