Mortgage Applications Decrease in Mar 1st MBA Weekly Survey

Mortgage applications decreased 5.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 24, 2023. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week.  The Refinance Index decreased 6 percent from the previous week and was 74 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 44 percent lower than the same week one year ago.

“The 30-year fixed rate increased to 6.71 percent last week, the highest rate since November 2022, which drove a 6 percent drop in applications. After a brief revival in application activity in January when mortgage rates dropped to 6.2 percent, there has now been three straight weeks of declines in applications as mortgage rates have jumped 50 basis points over the past month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Data on inflation, employment, and economic activity have signaled that inflation may not be cooling as quickly as anticipated, which continues to put upward pressure on rates.”

Added Kan, “Both purchase and refinance applications declined last week, with purchase index at a 28-year low for a second consecutive week. Purchase applications were 44 percent lower than a year ago, as homebuyers again retreat to the sidelines as higher rates crimp affordability. Refinance applications account for less than a third of all applications and remained more than 70 percent behind last year’s pace, as a majority of homeowners are already locked into lower rates.”  

The refinance share of mortgage activity decreased to 31.8 percent of total applications from 32.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.1 percent of total applications.

The FHA share of total applications remained unchanged at 12.1 percent from the week prior. The VA share of total applications decreased to 11.6 percent from 12.0 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.71 percent from 6.62 percent, with points increasing to 0.77 from0.75 (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 $726,200)remained at 6.44 percent, with points decreasing to 0.49 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate remained the same from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.45 percent from 6.39 percent, with points increasing to 1.19 from 1.16 (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 6.13 percent from 5.98 percent, with points remaining at 0.93 (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 5.73 percent from 5.66 percent, with points decreasing to 0.86 from 0.97 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. 

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.

Contact:

Falen Taylor – Media Contact – ftaylor@mba.org – (202) 557-2771

Source: Mortgage Bankers Association