MBA Weekly Survey July 20, 2022: Mortgage Applications Decrease

Mortgage applications decreased 6.3 percent from one week earlier, reported the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 15, 2022.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 17 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 80 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 16 percent compared with the previous week and was 19 percent lower than the same week one year ago.

“Mortgage applications declined for the third week in a row, reaching the lowest level since 2000,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Similarly, with most mortgage rates more than two percentage points higher than a year ago, demand for refinances continues to plummet, with MBA’s refinance index also falling to a 22-year low.”

Kan noted purchase activity declined for both conventional and government loans as the weakening economic outlook, high inflation and persistent affordability challenges impact buyer demand. “The decline in recent purchase applications aligns with slower homebuilding activity due to reduced buyer traffic and ongoing building material shortages and higher costs.”

The refinance share of mortgage activity increased to 31.4 percent of total applications from 30.8 percent the previous week. The adjustable-rate mortgage share of activity decreased to 9.5 percent of total applications.

The FHA share of total applications increased to 12.4 percent from 11.7 percent the week prior. The VA share of total applications decreased to 10.6 percent from 11.2 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.82 percent from 5.74 percent, with points increasing to 0.65 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) 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 5.31 percent from 5.25 percent, with points remaining at 0.38 (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 the FHA increased to 5.50 percent from 5.49 percent, with points decreasing to 1.02 from 1.08 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.88 percent from 4.93 percent, with points increasing to 0.76 from 0.72 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 4.60 percent from 4.71 percent, with points increasing to 0.96 from 0.77 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, visit www.mba.org/WeeklyApps, contact mbaresearch@mba.org or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.