Mortgage loan application volume fell 8.1% last week, down after jumping 12% the week prior, the Mortgage Bankers Association’s (MBA) weekly survey shows.
The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped 8.1%. The adjusted purchase index fell 10%, while the unadjusted purchase index fell 3% and was 12% lower YOY.
The refinance index fell 7% and was down 52% YOY. Refinances made up 56.2% of total applications.
“Purchase activity slowed after the previous week’s gain. Both conventional and FHA purchase applications saw proportional declines, resulting in purchase activity overall dropping 10 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“The average loan size again hit another record high at $446,000. Activity continues to be dominated by larger loan balances, as inventory remains tight for entry-level buyers.”
Mortgage rates continue to climb, with the 30-year fixed-rate rising to 3.83%, driving declining refinance applications.
The industry is bracing for impending layoffs as refinance applications dry up.
“You’re going to see a number of mortgage companies cut operation staff…they will not have an option,” Tim Wilson, CEO of Prosperity Home Mortgage, told RISMedia.
Companies such as Interfirst Mortgage and Freedom Mortgage have already begun layoffs, and Santander is expected to soon. Better.com recently made headlines with a tasteless mass layoff over Zoom.
The FHA share of total applications rose to 8% from 7.7%. The VA share of total applications rose to 10% from 9.9%, 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 3.78% to 3.83%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances rose from 3.59% to 3.62%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to 3.93% from 3.86%.