MBA Weekly Survey Sept. 6: Mortgage Applications Decrease

Mortgage applications decreased 2.9 percent from one week earlier, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Sept. 1, 2023. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.9 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 5 percent compared with the previous week.  The Refinance Index decreased 5 percent from the previous week and was 30 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 28 percent lower than the same week one year ago.

“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates. Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The 30-year fixed mortgage rate decreased to 7.21 percent last week, but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market. The refinance index dropped to its lowest level since January 2023, driven by a 6 percent decline in conventional refinances.”

The refinance share of mortgage activity decreased to 30.0 percent of total applications from 30.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.7 percent of total applications.

The FHA share of total applications increased to 13.7 percent from 13.2 percent the week prior. The VA share of total applications decreased to 11.3 percent from 11.6 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.21 percent from 7.31 percent, with points decreasing to 0.69 from 0.73 (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) decreased to 7.21 percent from 7.28 percent,with points increasing to 0.76 from 0.66 (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 decreased to 7.03 percent from 7.10 percent,with points decreasing to 0.95 from 1.09 (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 decreased to 6.66 percent from 6.72 percent, with points decreasing to 0.86 from 1.11 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 6.33 percent from 6.48 percent,with points decreasing to 1.11 from 1.20 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased 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.