Mortgage loan application volume fell 7.1% from last week, the Mortgage Bankers Association’s (MBA) weekly survey reported.
The adjusted Market Composite Index, a measure of mortgage loan application volume, decreased 7.1%. The adjusted purchase index fell 2%, while the unadjusted purchase index fell 5% and was 11% lower YOY.
The refinance index fell 13% and was down 53% YOY. Refinances made up 55.8% of total applications.
Mortgage rates continue to climb, with the 30-year fixed-rate reaching its highest level since March 2020 last week, 77 basis points above the same time last year.
“Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week. After almost two years of lower rates, there are not many borrowers left who have an incentive to refinance. Of those who are still in the market for a refinance, these higher rates are proving much less attractive to them,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The average loan size grew once again to $433,500, besting the record-breaking $418,500 from two weeks ago.
“The ongoing supply shortage continues to put upward pressure on house price appreciation as buyers compete to buy what few homes are for sale. You can’t buy what’s not for sale, but you will compete for what is,” said First American Chief Economist Mark Fleming.
“Rapid house price appreciation and its differing impact on existing and first-time homebuyers will persist until the supply and demand imbalance improves. In the game of housing musical chairs, it’s clear the housing market needs more chairs.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose from 3.64% to 3.72%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances rose from 3.54% to 3.56%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA rose to 3.69% from 3.64%.