MBA Weekly Applications Survey Feb. 16, 2022: 30-Year Rates Push Above 4%

Mortgage interest rates pushed above 4 percent for the first time since 2019 and sent mortgage applications tumbling for the second straight week, the Mortgage Bankers Association reported Wednesday.

The MBA Weekly Applications Survey for the week ending Feb. 11 reported the

Market Composite Index fell by 5.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 3 percent from the previous week. 

The unadjusted Refinance Index decreased by 9 percent from the previous week and was 54 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 52.8 percent of total applications from 56.2 percent the previous week.

The seasonally adjusted Purchase Index decreased by 1 percent from one week earlier. The unadjusted Purchase Index increased 5 percent from the previous week and was 7 percent lower than the same week one year ago.

The FHA share of total applications increased to 8.3 percent from 8.0 percent the week prior. The VA share of total applications decreased to 9.3 percent from 10.0 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

“Mortgage rates increased across the board last week following the recent rise in Treasury yields, which have moved higher due to unrelenting inflationary pressures and increased market expectations of more aggressive policy moves by the Federal Reserve,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.  Consistent with this period of higher mortgage rates, refinance applications fell 9 percent last week and stood at around half of last year’s pace. The refinance share of applications was also at its lowest level since July 2019.”

Kan noted purchase applications saw a modest decline over the week, with government purchase applications accounting for most of the decrease. “Prospective buyers still face elevated sales prices in addition to higher mortgage rates,” he said. “The heavier mix of conventional applications again contributed to another record average loan size at $453,000.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.05 percent from 3.83 percent, with points increasing to 0.45 from 0.40 (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 3.81 percent from 3.62 percent, with points increasing to 0.39 from 0.35 (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 4.01 percent from 3.93 percent, with points increasing to 0.59 from 0.54 (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 3.37 percent from 3.16 percent, with points increasing to 0.50 from 0.47 (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 3.36 percent from 3.13 percent, with points increasing to 0.48 from 0.35 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 5.0 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.