MBA Weekly Survey Nov. 30, 2022: Applications Down Despite Falling Rates

Mortgage applications fell for the first time in three weeks despite interest rates falling below 6.5 percent, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending November 25. 

The week’s results include an adjustment for the observance of the Thanksgiving holiday.

The Market Composite Index fell by 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 33 percent from the previous week. 

Refis took a hit. The unadjusted Refinance Index decreased by 13 percent from the previous week and was 86 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 26.1 percent of total applications from 28.4 percent the previous week. Both measures were at their lowest levels since 2000.

Purchase applications, however, picked up. The seasonally adjusted Purchase Index increased by 4 percent from one week earlier. The unadjusted Purchase Index decreased by 31 percent from the previous week and was 41 percent lower than the same week one year ago.

The FHA share of total applications decreased to 12.2 percent from 13.4 percent the week prior. The VA share of total applications increased to 11.2 percent from 10.5 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

“Mortgage rates declined again last week, following bond yields lower,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes. Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.49 percent from 6.67 percent, with points holding at 0.68 (including origination fee) for 80 percent loan-to-value ratio loans.  The effective rate decreased from last week. The 30-year fixed mortgage rate has fallen 57 basis points over the past four weeks.

Additionally, mortgage rates for most other loan types declined. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 6.35 percent from 6.30 percent, with points decreasing to 0.61 from 0.74 (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 decreased to 6.57 percent from 6.66 percent, with points increasing to 1.14 from 1.01 (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 6.02 percent from 6.08 percent, with points decreasing to 0.69 from 0.70 (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 5.48 percent from 5.78 percent, with points increasing to 0.89 from 0.73 (including origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The ARM share of activity increased to 9.0 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.