MBA Weekly Survey June 15, 2022: Applications Up 1st Time in 5 Weeks

Mortgage applications rose for the first time in five weeks, even as interest rates jumped to the highest level since 2008, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending June 10. 

Last week’s results include an adjustment for the Memorial Day holiday.

The Market Composite Index increased by 6.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 17 percent from the previous week. 

The unadjusted Refinance Index increased by 4 percent from the previous week and was 76 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 31.7 percent of total applications from 32.2 percent the previous week.

The seasonally adjusted Purchase Index increased by 8 percent from one week earlier. The unadjusted Purchase Index increased by 18 percent from the previous week and was 16 percent lower than the same week one year ago.

The FHA share of total applications increased to 11.8 percent from 11.3 percent the week prior. The VA share of total applications increased to 11.7 percent from 11.4 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

“Mortgage rates followed Treasury yields up in response to higher-than-expected inflation and anticipation that the Federal Reserve will need to raise rates at a faster pace,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29 percent below pre-holiday levels. With mortgage rates well above 5 percent, refinance activity continues to run more than 70 percent lower than last year.”

Kan noted purchase applications fell by more than 15 percent from last year, “as ongoing inventory shortages and affordability challenges have cooled demand, coinciding with the rapid jump in mortgage rates.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.65 percent from 5.40 percent, with points increasing to 0.71 from 0.60 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.25 percent from 4.99 percent, with points increasing to 0.54 from 0.44 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA increased to 5.36 percent from 5.30 percent, with points increasing to 1.00 from 0.79 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.79 percent from 4.62 percent, with points increasing to 0.80 from 0.65 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 4.57 percent from 4.51 percent, with points increasing to 0.8 from 0.68 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 8.1 percent of total applications.

The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.