Mortgage applications decrease in latest MBA weekly survey

Higher interest rates cited for ongoing slowdown

U.S. home sales
A home for sale in northeast Cedar Rapids. CREDIT RICHARD PRATT

Mortgage applications decreased 0.1% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Nov. 4.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.1% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 2% compared with the previous week. The Refinance Index decreased 4% from the previous week and was 87% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 41% lower than the same week one year ago.

“Mortgage rates edged higher last week following news that the Federal Reserve will continue raising short-term rates to combat high inflation,” Joel Kan, MBA’s vice president and deputy chief economist, said in a release. “The 30-year fixed rate remained above 7% for the third consecutive week, and there were increases for most other loan types. Purchase applications increased for the first time after six weeks of declines but remained close to 2015 lows, as homebuyers remained sidelined by higher rates and ongoing economic uncertainty. Refinances continued to fall, with the index hitting its lowest level since August 2000.”

The refinance share of mortgage activity decreased to 28.1% of total applications from 28.6% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 12% of total applications.

The FHA share of total applications decreased to 13.3% from 13.5% the week prior. The VA share of total applications remained unchanged at 10.3% from the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 7.14% from 7.06%, with points increasing to 0.77 from 0.73 (including the origination fee) for 80% 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) decreased to 6.50 percent from 6.55%, with points increasing to 0.78 from 0.70 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.86% from 6.70%, with points increasing to 1.37 from 1.18 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.40% from 6.37%, with points increasing to 1.13 from 1.05 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 5.87% from 5.79%, with points increasing to 0.92 from 0.90 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.