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MBA: Mortgage Applications Decrease in Latest Weekly Survey

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by Calculated Risk on 7/20/2022 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 6.3 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending July 15, 2022.

… The Refinance Index decreased 4 percent from the previous
week and was 80 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 16 percent
compared with the previous week and was 19 percent lower than the same week one year ago.

“Mortgage applications declined for the third week in a row, reaching the lowest level since 2000.
Similarly, with most mortgage rates more than two percentage points higher than a year ago, demand for
refinances continues to plummet, with MBA’s refinance index also falling to a 22-year low,” said Joel Kan,
MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase activity declined for
both conventional and government loans, as the weakening economic outlook, high inflation, and
persistent affordability challenges are impacting buyer demand. The decline in recent purchase
applications aligns with slower homebuilding activity due to reduced buyer traffic and ongoing building
material shortages and higher costs.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($647,200 or less) increased to 5.82 percent from 5.74 percent, with points increasing to 0.65 from 0.59
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index has declined sharply over the last several months.
The refinance index is at the lowest level since the year 2000.
The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 19% year-over-year unadjusted.
The purchase index is now only 14% above the pandemic low.

Note: Red is a four-week average (blue is weekly).

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