MBA Weekly Applications Survey Mar. 9, 2022: Falling Rates Spark Flurry of Activity

Mortgage applications jumped last week as interest rates fell for the first time since December, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending March 4. 

The Market Composite Index increased by 8.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 10 percent from the previous week. 

The unadjusted Refinance Index increased by 9 percent from the previous week but was 50 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 49.5 percent of total applications from 49.9 percent the previous week.

The seasonally adjusted Purchase Index increased by 9 percent from one week earlier. The unadjusted Purchase Index increased by 11 percent from the previous week but was 7 percent lower than the same week one year ago.

The FHA share of total applications increased to 8.7 percent from 8.6 percent the week prior. The VA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

“Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “A 6-basis-point decline in the 30-year fixed-rate mortgage led to a slight rebound in total refinance activity, with a larger gain in government refinances.”

Looking ahead, Kan said, “the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other. Purchase activity also increased, as prospective buyers acted on lower rates and the early start of the spring buying season. The average loan size remained close to record highs, with higher-balance loan applications continuing to dominate growth.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 4.09 percent from 4.15 percent, with points unchanged at 0.44 (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 3.79 percent from 3.88 percent, with points decreasing to 0.39 from 0.40 (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 4.12 percent from 4.15 percent, with points decreasing to 0.73 from 0.74 (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 3.39 percent from 3.47 percent, with points decreasing to 0.46 from 0.47 (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 3.38 percent from 3.44 percent, with points decreasing to 0.28 from 0.35 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 5.2 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.