MBA Weekly Applications Survey May 4, 2022: Applications Increase

MBA NewsLink Staff

Mortgage applications increased 2.5 percent from one week earlier, according the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 29.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 0.2 percent from the previous week and was 71 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 11 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 33.9 percent of total applications from 35.0 percent the previous week. The adjustable-rate mortgage share of activity remained unchanged at 9.3 percent of total applications.

“Treasury yields eased slightly last week but remained close to 2018 highs, as financial markets await the news from the Federal Reserve on its latest plans for rate hikes and reducing its balance sheet holdings,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. He noted the 30-year fixed rate was 5.36 percent, up over two percentage points from a year ago.

Kan said the 127-basis-point jump in rates over the past two months has triggered a 49 percent drop in refinance activity. “Purchase applications increased for conventional, FHA, and VA loans and were up 4 percent overall,” he said. “This is potentially a good sign for the spring home buying season, which has seen a slow start thus far. The purchase market remains challenged by low levels of housing inventory and rapid home-price gains, as well as the affordability hit from higher mortgage rates that are forcing prospective buyers to factor in higher monthly payments.”

Kan said the ARM share remained unchanged at around 9 percent, well below the 30 percent mark observed in the mid-2000s.

The FHA share of total applications increased to 11.1 percent from 10.6 percent the week prior. The VA share of total applications increased to 10.3 percent from 10.2 percent the week prior. The USDA share of total applications decreased to 0.4 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) decreased to 5.36 percent from 5.37 percent, with points decreasing to 0.63 from 0.67 (including the 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) increased to 4.92 percent from 4.89 percent, with points decreasing to 0.43 from 0.47 (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 decreased to 5.27 percent from 5.29 percent, with points decreasing to 0.85 from 0.88 (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 remained unchanged at 4.68 percent, with points decreasing to 0.76 from 0.80 (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 4.25 percent from 4.28 percent, with points increasing to 0.78 from 0.74 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The MBA Weekly Applications Survey survey covers more than 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.