MBA Weekly Survey July 6, 2022: Applications, Rates Take Tumbles

Mortgage applications fell for the first time in four weeks, while mortgage rates fell for the second straight week, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending July 1. 

This week’s results include a holiday adjustment to account for early closings on Friday, July 1, ahead of the Independence Day holiday.

The Market Composite Index fell by 5.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 6 percent from the previous week. 

The unadjusted Refinance Index decreased by 8 percent from the previous week and was 78 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 29.6 percent of total applications from 30.3 percent the previous week.

The seasonally adjusted Purchase Index decreased by 4 percent from one week earlier. The unadjusted Purchase Index increased by 7 percent from the previous week but was 17 percent lower than the same week one year ago.

The FHA share of total applications remained unchanged at 12.0 percent from the week prior. The VA share of total applications decreased to 11.1 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged at 0.6 percent from the week prior.

“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Mortgage rates have increased sharply thus far in 2022 but have fallen 24 basis points over the past two weeks, with the 30-year fixed rate at 5.74 percent. Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed. Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.74 percent from 5.84 percent, with points increasing to 0.65 from 0.64 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 5.28 percent from 5.42 percent, with points increasing to 0.44 from 0.28 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 5.60 percent from 5.62 percent, with points decreasing to 0.89 from 1.15 (including 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 4.96 percent from 5.06 percent, with points decreasing to 0.68 from 0.72 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 4.62 percent from 4.64 percent, with points remaining at 0.72 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 9.5 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.