MBA Weekly Survey Sept. 14, 2022: Applications Fall 6th Straight Week; Interest Rates Top 6%

Mortgage applications fell for the sixth straight week as interest rates topped 6 percent, although purchase applications showed signs of life, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending Sept. 9. 

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 12 percent from the previous week. 

The unadjusted Refinance Index decreased by 4 percent from the previous week and was 83 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 30.2 percent of total applications from 30.7 percent the previous week.

The seasonally adjusted Purchase Index rose for the first time in weeks, increasing by 0.2 percent from one week earlier. The unadjusted Purchase Index decreased by 12 percent from the previous week and was 29 percent lower than the same week one year ago.

The FHA share of total applications increased to 13.4 percent from 13.3 percent the week prior. The VA share of total applications increased to 11.3 percent from 10.8 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

“The 30-year fixed mortgage rate hit the six percent mark for the first time since 2008 – rising to 6.01 percent – which is essentially double what it was a year ago,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Higher mortgage rates have pushed refinance activity down more than 80 percent from last year and have contributed to more homebuyers staying on the sidelines. Government loans, which tend to be favored by first-time buyers, bucked this trend and increased over the week, driven mainly by VA and USDA lending activity.”

Kan noted the spread between the conforming 30-year fixed mortgage rate and both ARM and jumbo loans remained wide last week, at 118 and 45 basis points, respectively. “The wide spread underscores the volatility in capital markets due to uncertainty about the Fed’s next policy moves,” he said.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.01 percent from 5.94 percent, with points decreasing to 0.76 from 0.79 (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 5.56 percent from 5.46 percent, with points decreasing to 0.39 from 0.40 (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 5.71 percent from 5.61 percent, with points increasing to 1.12 from 1.06 (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 5.30 percent from 5.23 percent, with points increasing to 0.89 from 0.86 (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 4.83 percent from 4.81 percent, with points decreasing to 0.52 from 0.88 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 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.