Mortgage Applications Decreased 5.4 Percent From One Week Earlier

Mortgage applications decreased 5.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 1, 2022. This week’s results include a holiday adjustment to account for early closings the Friday before Independence Day.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 78 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 17 percent lower than the same week one year ago.

“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower. Mortgage rates have increased sharply thus far in 2022 but have fallen 24 basis points over the past two weeks, with the 30-year fixed rate at 5.74 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed. Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance.”

The refinance share of mortgage activity decreased to 29.6 percent of total applications from 30.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.5 percent of total applications.

The FHA share of total applications remained unchanged at 12.0 percent from the week prior. The VA share of total applications decreased to 11.1 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged at 0.6 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.74 percent from 5.84 percent, with points increasing to 0.65 from 0.64 (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 $647,200) decreased to 5.28 percent from 5.42 percent, with points increasing to 0.44 from 0.28 (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 5.60 percent from 5.62 percent, with points decreasing to 0.89 from 1.15 (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 4.96 percent from 5.06 percent, with points decreasing to 0.68 from 0.72 (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 4.62 percent from 4.64 percent, with points increasing to 0.72 from 0.72 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.