MBA Weekly Survey Mar. 29, 2023: Applications Up 4th Straight Week as Rates Continue to Fall

Mortgage interest rates fell for the third straight week, and mortgage application activity increased for the fourth straight week, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending March 24. 

The Market Composite Index increased by 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent from the previous week. 

The unadjusted Refinance Index increased by 5 percent from the previous week but was 61 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 29.1 percent of total applications from 28.6 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 2 percent from the previous week but was 35 percent lower than the same week one year ago.

The FHA share of total applications remained unchanged at 12.3 percent the week prior. The VA share of total applications decreased to 11.6 percent from 11.7 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

“Application activity increased as mortgage rates declined for the third straight week,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “The 30-year fixed rate declined to 6.45 percent, the lowest level in over a month. While the 30-year fixed rate remained 1.65 percentage points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications. Home price growth has slowed markedly in many parts of the country, which has helped to improve buyers’ purchasing power. Purchase applications remain over 30 percent behind last year’s pace, but recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”

Kan noted refinance activity also picked up last week, but remains 61 percent below last year’s pace. “Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance,” he said.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.45 percent from 6.48 percent, with points decreasing to 0.62 from 0.66 (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 6.27 percent from 6.30 percent, with points decreasing to 0.54 from 0.55 (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 increased to 6.33 percent from 6.32 percent, with points decreasing to 0.93 from 1.07 (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 5.84 percent from 6.02 percent, with points decreasing to 0.57 from 0.60 (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 increased to 5.62 percent from 5.58 percent, with points increasing to 0.91 from 0.75 (including origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The ARM share of activity decreased to 7.7 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.