MBA Weekly Applications Survey Mar. 2, 2022: Mortgage Applications Down Again as Rates Push Higher

Mortgage applications fell again last week to their lowest levels since 2019 as mortgage interest rates pushed to highs not seen in nearly three years, the Mortgage Bankers Association reported Wednesday in its Weekly Applications Survey for the week ending Feb. 25.

The Market Composite Index fell by 0.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 1 percent from the previous week. 

The unadjusted Refinance Index actually increased by 1 percent from the previous week, but was 56 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 49.9 percent of total applications from 50.1 percent the previous week.

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 1 percent from the previous week and was 9 percent lower than the same week one year ago.

The FHA share of total applications decreased to 8.6 percent from 8.7 percent the week prior. The VA share of total applications increased to 10.2 percent from 9.9 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

“Mortgage rates last week reached multi-year highs, putting a damper on applications activity,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Although there was an increase in government refinance applications, higher rates continue to push potential refinance borrowers out of the market. Purchase activity remained weak, but the average loan size increased again, which indicates that home-price growth remains strong, and a greater share of the activity is occurring at the higher end of the market.”

Additionally, Kan noted, “We will continue to assess the potential impact on mortgage demand from the sharp drop in interest rates this week due to the invasion of Ukraine.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.15 percent from 4.06 percent, with points decreasing to 0.44 from 0.48 (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 3.88 percent from 3.84 percent, with points decreasing to 0.40 from 0.45 (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 4.15 percent from 4.09 percent, with points increasing to 0.74 from 0.56 (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 3.47 percent from 3.42 percent, with points increasing to 0.47 from 0.45 (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 increased to 3.44 percent from 3.26 percent, with points increasing to 0.35 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity increased to 5.3 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.