MBA Weekly Survey Aug. 30: Mortgage Applications Increase

Mortgage applications increased 2.3 percent from one week earlier, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 25, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week and was 28 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 0.3 percent compared with the previous week and was 27 percent lower than the same week one year ago.

“Mortgage rates were mostly unchanged last week, with the 30-year fixed rate remaining at 7.31 percent – the highest since December 2000. Treasury yields peaked early in the week and did move lower by the end, which may have spurred some activity,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Mortgage applications for home purchases and refinances increased for the first time in five weeks but remained at low levels. Purchase applications increased but were still 27 percent lower than a year ago, as elevated mortgage rates and tight housing inventory continue to weigh on home buying activity.”

Kan noted the refinance market continues to be slow despite last week’s gain, which was driven by a 7.9 percent spike in conventional refinances. “Government refinance applications dropped more than 10 percent last week,” he said.

The refinance share of mortgage activity increased to 30.1 percent of total applications from 29.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.5 percent of total applications.

The FHA share of total applications decreased to 13.2 percent from 14.3 percent the week prior. The VA share of total applications remained unchanged at 11.6 percent from 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 ($726,200 or less) remained unchanged at 7.31 percent, with points decreasing to 0.73 from 0.78 (including the origination fee) for 80 percent loan-to-value ratio (LTV) 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 $726,200) increased to 7.28 percent from 7.27 percent, with points decreasing to 0.66 from 0.84 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 7.10 percent from 7.09 percent, with points decreasing to 1.09 from 1.20 (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 6.72 percent, with points increasing to 1.11 from 1.06 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 6.48 percent from 6.50 percent, with points increasing to 1.20 from 1.03 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

Click here to purchase a subscription of MBA’s Weekly Applications Survey. The survey covers over 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.