MBA Weekly Survey Mar. 15, 2023: Rates Drop; Applications Up Second Straight Week
Mortgage applications rose for the second consecutive week as a drop in mortgage interest rates spurred an uptick in activity, the Mortgage Bankers Association reported Tuesday in its Weekly Mortgage Applications Survey for the week ending March 10.
The Market Composite Index increased by 6.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by7 percent from the previous week.
The unadjusted Refinance Index increased by 5 percent from the previous week but was 74 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 28.2 percent of total applications from 28.9 percent the previous week.
The seasonally adjusted Purchase Index increased by 7 percent from one week earlier. The unadjusted Purchase Index increased by 8 percent from the previous week but was 38 percent lower than the same week one year ago.
The FHA share of total applications increased to 12.9 percent from 12.8 percent the week prior. The VA share of total applications decreased to 11.9 percent from 12.0 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.71 percent from 6.79 percent, with points decreasing to 0.79 from 0.80 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.
“Treasury yields declined late last week, as market concerns over bank closures and the potential for broader ripple effects triggered a flight to safety in Treasury bonds,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “This decline pushed mortgage rates for all loan types lower, with the 30-year fixed rate decreasing to 6.71 percent. Home-purchase applications increased for the second straight week but remained almost 40 percent below last year’s pace.
“While lower rates should buoy housing demand, the financial market volatility may cause buyers to pause their decisions,” Kan added. “Refinance activity remained more than 70 percent behind last year’s level, as rates are still more than two percentage points higher than a year ago. The dip in rates did bring some borrowers back as evidenced by the 5 percent increase in refinance applications last week.”
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 6.39 percent from 6.49 percent, with points increasing to 0.61 from 0.59 (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 6.58 percent from 6.56 percent, with points decreasing to 1.20 from 1.21 (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 decreased to 6.14 percent from 6.25 percent, with points decreasing to 0.77 from 1.01 (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 5.69 percent from 5.75 percent, with points decreasing to 0.87 from 0.95 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity decreased to 8.5 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.
