MBA Weekly Applications Survey Mar. 16, 2022: Rate Volatility Drives Down Refis

Mortgage rates rose again last week to their highest level since 2019, resulting in a drop in refinance applications—although purchase applications rose slightly—the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending March 11. 

The Market Composite Index fell by 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 1 percent from the previous week. 

The unadjusted Refinance Index fell by 3 percent from the previous week and was 49 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 48.4 percent of total applications from 49.5 percent the previous week.

The seasonally adjusted Purchase Index increased by 1 percent from one week earlier. The unadjusted Purchase Index increased by 2 percent from the previous week but was 8 percent lower than the same week one year ago.

The FHA share of total applications remained unchanged at 8.7 percent from the week prior. The VA share of total applications increased to 10.5 percent from 10.4 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

“Mortgage rates continue to be volatile due to the significant uncertainty regarding Federal Reserve policy and the situation in Ukraine,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Investors are weighing the impacts of rapidly increasing inflation in the U.S. and many other parts of the world against the potential for a slowdown in economic growth due to a renewed bout of supply-chain constraints.”

Kan noted after declining two weeks ago, the 30-year fixed-rate mortgage increased last week to 4.27 percent – the highest since May 2019. “Rates are now roughly a full percentage point higher than a year ago and continue to hamper refinance activity,” he said. “Refinances declined for both conventional and government loans. Purchase applications slightly increased, with both conventional and VA loan applications

seeing gains. The average purchase application loan size remained elevated at $453,200 – the second-highest amount in MBA’s survey.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.27 percent from 4.09 percent, with points increasing to 0.54 from 0.44 (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 4.02 percent from 3.79 percent, with points decreasing to 0.37 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 4.23 percent from 4.12 percent, with points decreasing to 0.62 from 0.73 (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 3.55 percent from 3.39 percent, with points unchanged at 0.46 (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 3.36 percent from 3.38 percent, with points decreasing to 0.23 from 0.28 (including origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The ARM share of activity increased to 5.6 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.