Mortgage Apps Increased 6.6 Percent From One Week Earlier

Mortgage applications increased 6.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 10, 2022. Last week’s results are compared to the prior week, which included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 6.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 17 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week and was 76 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index increased 18 percent compared with the previous week and was 16 percent lower than the same week one year ago.

“Mortgage rates increased for all loan types, with the 30-year fixed rate last week jumping 25 basis points to 5.65 percent – the highest level since 2008. Mortgage rates followed Treasury yields up in response to higher-than-expected inflation and anticipation that the Federal Reserve will need to raise rates at a faster pace,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29 percent below pre-holiday levels. With mortgage rates well above 5 percent, refinance activity continues to run more than 70 percent lower than last year.”

Added Kan, “Purchase applications were down more than 15 percent compared to last year, as ongoing inventory shortages and affordability challenges have cooled demand, coinciding with the rapid jump in mortgage rates.”

The refinance share of mortgage activity decreased to 31.7 percent of total applications from 32.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.1 percent of total applications.

The FHA share of total applications increased to 11.8 percent from 11.3 percent the week prior. The VA share of total applications increased to 11.7 percent from 11.4 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.65 percent from 5.40 percent, with points increasing to 0.71 from 0.60 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 5.25 percent from 4.99 percent, with points increasing to 0.54 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.36 percent from 5.30 percent, with points increasing to 1.00 from 0.79 (including the 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 increased to 4.79 percent from 4.62 percent, with points increasing to 0.80 from 0.65 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 4.57 percent from 4.51 percent, with points increasing to 0.8 from 0.68 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.