Mortgage loan application volume ticked up 0.2% last week, the Mortgage Bankers Association’s (MBA) weekly survey reported.
The Market Composite Index, which measures application volume, rose 0.2% on an adjusted basis. On an unadjusted basis, they rose 0.4% from the week before. The Refinance Index fell 1% and was 16% lower than a year ago.
The seasonally adjusted Purchase Index rose 2%, while the unadjusted Purchase Index rose 2% compared to the week before, down 10% from the previous year.
“Mortgage rates reached their highest level since June 2021, but application activity changed little this week. An increase in home purchase applications offset a slight decline in refinances,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“The increase in purchase applications was welcome news, but was primarily driven by a 2% gain in conventional purchase applications, which kept the average loan size elevated.”
Mortgage applications dropped to their lowest levels in three months the week before, capping a multi-week plummet. This week’s slight increase cuts off the momentum, but it likely won’t start a new trend upwards. The housing market is about to start its slowest season, and interest rates are set to continue rising.
“We continue to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive,” Kan said.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.18%. It is the highest rate since June, up 15 basis points in the last month.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances increased to 3.22% from 3.20%
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.20% from 3.12%.