MBA Weekly Survey Mar. 22, 2023: Falling Rates Drive Applications Up Third Straight Week

Mortgage interest rates fell to their lowest level since February, spurring increased application activity for the third straight week, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending March 17. 

The Market Composite Index increased by 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 3 percent from the previous week. 

The unadjusted Refinance Index increased by 5 percent from the previous week but was 68 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 28.6 percent of total applications from 28.2 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 3 percent from the previous week but was 36 percent lower than the same week one year ago.

The FHA share of total applications decreased to 12.3 percent from 12.9 percent the week prior. The VA share of total applications decreased to 11.7 percent from 11.9 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

“Treasury yields declined last week, driven by uncertainty over the health of the banking sector and worries about the broader impact on the economy. Mortgage rates declined for the second week in a row, with the 30-year fixed rate dropping to 6.48 percent, the lowest level in a month,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “However, mortgage rates have not dropped as much as Treasury rates due to increased MBS market volatility. The spread between the 30-year fixed and 10-year Treasury remained wide at around 300 basis points, compared to a more typical spread of 180 basis points.”

Kan noted both purchase and refinance applications increased for the third week in a row “as borrowers took the opportunity to act, even though overall application volume remains at relatively low levels.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.48 percent from 6.71 percent, with points decreasing to 0.66 from 0.79 (including 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 $726,200) decreased to 6.30 percent from 6.39 percent, with points decreasing to 0.55 from 0.61 (including 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 FHA decreased to 6.32 percent from 6.58 percent, with points decreasing to 1.07 from 1.20 (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 6.14 percent, with points decreasing to 0.60 from 0.77 (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 5.58 percent from 5.69 percent, with points decreasing to 0.75 from 0.87 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 8.6 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.