MBA Weekly Survey Sept. 21, 2022: Applications, Interest Rates Rise

Mortgage applications rose for the first time in six weeks despite another sharp jump in mortgage interest rates, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending Sept. 16. 

Last week’s results include an adjustment for the Labor Day holiday.

The Market Composite Index increased by 3.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 14 percent from the previous week. 

The unadjusted Refinance Index increased by 10 percent from the previous week but was 83 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 32.5 percent of total applications from 30.2 percent the previous week.

The seasonally adjusted Purchase Index increased by 1 percent from one week earlier. The unadjusted Purchase Index increased by 11 percent from the previous week but was 30 percent lower than the same week one year ago.

The FHA share of total applications decreased to 13.3 percent from 13.4 percent the week prior. The VA share of total applications decreased to 10.9 percent from 11.3 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce – in their efforts to slow inflation – another sizable short-term rate hike,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25 percent – the highest since October 2008. As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels, with purchase applications 30 percent lower and refinance activity down 83 percent. The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.25 percent from 6.01 percent, with points decreasing to 0.71 from 0.76 (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 5.79 percent from 5.56 percent, with points increasing to 0.46 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 5.85 percent from 5.71 percent, with points increasing to 1.15 from 1.12 (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 5.40 percent from 5.30 percent, with points increasing to 1.06 from 0.89 (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 5.14 percent from 4.83 percent, with points increasing to 0.99 from 0.52 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity remained unchanged at 9.1 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.