MBA Weekly Survey Oct. 26, 2022: Rates Increase 10th Straight Week; Applications Drop Again
Mortgage rates rose for the 10th consecutive week, driving mortgage applications to another 25-year low, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending October 21.
The Market Composite Index fell by 1.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 2 percent from the previous week.
The unadjusted Refinance Index increased by 0.1 percent from the previous week but was 86 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 28.8 percent of total applications from 28.3 percent the previous week.
The seasonally adjusted Purchase Index fell by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 3 percent from the previous week and was 42 percent lower than the same week one year ago.
The FHA share of total applications increased to 13.9 percent from 13.6 percent the week prior. The VA share of total applications remained unchanged at 10.7 percent from the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.
“The ongoing trend of rising mortgage rates continues to depress mortgage application activity, which remained at its slowest pace since 1997,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “Refinance applications were essentially unchanged, but purchase applications declined 2 percent to the slowest pace since 2015 – over 40 percent behind last year’s pace. Despite higher rates and lower overall application activity, there was a slight increase in FHA purchase applications, as FHA rates remained lower than conventional loan rates.”
Kan said the latest MBA forecast expects both economic and housing market weakness in 2023 to drive a 3 percent decline in purchase originations, while refinance volume is anticipated to decline by 24 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 7.16 percent from 6.94 percent—the highest rate since 2001—with points decreasing to 0.88 from 0.95 (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 6.53 percent from 6.31 percent, with points increasing to 0.68 from 0.67 (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 6.79 percent from 6.63 percent, with points decreasing to 1.59 from 1.60 (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 6.39 percent from 6.09 percent, with points increasing to 1.52 from 1.18 (including 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 5.86 percent from 5.65 percent, with points decreasing to 0.88 from 0.90 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The ARM share of activity decreased to 12.7 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.
