MBA Weekly Applications Survey Feb. 24: Rates Jump; Snow Falls; Apps Stumble

Mortgage interest rates hit 3 percent for the first time in nearly six months and harsh weather across much of the country put a damper on mortgage application activity, the Mortgage Bankers Association reported this morning in its Weekly Applications Survey for the week ending Feb. 19.

“Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed rate last week climbing above 3 percent to its highest level since September 2020,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Additionally, the severe winter weather in Texas affected many households and lenders, causing more than a 40 percent drop in both purchase and refinance applications in the state last week.”

MBA reported the Market Composite Index decreased by 11.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 10 percent compared to the previous week.

The unadjusted Refinance Index decreased by 11 percent from the previous week but was 50 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 68.5 percent of total applications from 69.3 percent the previous week.

The seasonally adjusted Purchase Index decreased by 12 percent from one week earlier. The unadjusted Purchase Index decreased by 8 percent compared to the previous week and was 7 percent higher than the same week one year ago.

“The housing market in most of the country remains strong, with activity last week 7 percent higher than a year ago,” Kan said. “The average loan size of purchase applications increased to a record $418,000, in line with the accelerating home-price growth caused by very low inventory levels.”

MBA said the FHA share of total applications increased to 11.2 percent from 9.0 percent the week prior. The VA share of total applications decreased to 11.9 percent from 13.2 percent the week prior. The USDA share of total applications decreased to 0.3 percent from 0.4 percent the week prior.

The report said the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.08 percent from 2.98 percent, with points increasing to 0.46 from 0.43 (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 $548,250) increased to 3.23 percent from 3.11 percent, with points increasing to 0.43 from 0.35 (including the 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 3.00 percent from 2.93 percent, with points decreasing to 0.33 from 0.37 (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 2.56 percent from 2.47 percent, with points increasing to 0.40 from 0.36 (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 remained unchanged 2.83 percent, with points decreasing to 0.36 from 0.70 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 2.7 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.