MBA Weekly Applications Survey Feb. 24, 2022: Mortgage Applications Fall to 2-Year Low

Mortgage applications fell to their lowest level since December 2019 as mortgage interest rates stayed above 4 percent, the Mortgage Bankers Association reported Wednesday in its Weekly Applications Survey for the week ending Feb. 18.

The Market Composite Index fell by 13.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 11 percent from the previous week. 

The unadjusted Refinance Index fell by by 16 percent from the previous week and was 56 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 50.1 percent of total applications from 52.8 percent the previous week.

The seasonally adjusted Purchase Index fell by 10 percent from one week earlier. The unadjusted Purchase Index fell by 6 percent from the previous week and was 6 percent lower than the same week one year ago.

The FHA share of total applications increased to 8.7 percent from 8.3 percent the week prior. The VA share of total applications increased to 9.9 percent from 9.3 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

“Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Conventional refinances in particular saw a 17 percent decrease last week. Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.06 percent from 4.05 percent, with points increasing to 0.48 from 0.45 (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 3.84 percent from 3.81 percent, with points increasing to 0.45 from 0.39 (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 4.09 percent from 4.01 percent, with points decreasing to 0.56 from 0.59 (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 3.42 percent from 3.37 percent, with points decreasing to 0.45 from 0.50 (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 decreased to 3.26 percent from 3.36 percent, with points decreasing to 0.34 from 0.48 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 5.1 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.