Mortgage Applications Decrease in May 18th MBA Weekly Survey

Mortgage applications decreased 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 13, 2022.

The Market Composite Index, a measure of mortgage loan application volume, decreased 11.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 11 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week and was 76 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 15 percent lower than the same week one year ago.

“Mortgage applications decreased for the first time in three weeks, as mortgage rates – despite declining last week – remained over two percentage points higher than a year ago and close to the highest levels since 2009. For borrowers looking to refinance, the current level of rates continues to be a significant disincentive,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications fell 12 percent last week, as prospective homebuyers have been put off by higher rates and worsening affordability conditions. Furthermore, general uncertainty about the near-term economic outlook, as well as recent stock market volatility, may be causing some households to delay their home search.”

Added Kan, “These results were consistent with MBA’s May forecast released earlier this week, which now calls for fewer home sales and mortgage originations in 2022 compared to a year ago.”

The refinance share of mortgage activity increased to 33.0 percent of total applications from 32.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 10.3 percent of total applications.

The FHA share of total applications increased to 11.1 percent from 10.5 percent the week prior. The VA share of total applications remained unchanged at 10.5 percent. The USDA share of total applications remained unchanged at 0.5 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.49 percent from 5.53 percent, with points increasing to 0.74 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 $647,200) decreased to 5.03 percent from 5.08 percent, with points increasing to 0.61 from 0.42 (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 decreased to 5.32 percent from 5.37 percent, with points decreasing to 0.71 from 0.87 (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 4.73 percent from 4.79 percent, with points increasing to 0.82 from 0.80 (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 4.42 percent from 4.47 percent, with points remained unchanged at 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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:

Adam DeSanctis – Media Contact – adesanctis@mba.org – (202) 557-2727

Source: Mortgage Bankers Association