WASHINGTON, D.C. (October 19, 2022) — Mortgage applications decreased 4.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 14, 2022.  

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.5 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 7 percent from the previous week and was 86 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 38 percent lower than the same week one year ago.

“Mortgage applications are now into their fourth month of declines, dropping to the lowest level since 1997, as the 30-year fixed mortgage rate hit 6.94 percent – the highest level since 2002,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market. Residential housing activity ranging from housing starts to home sales have been on downward trends coinciding with the rise in rates. The current 30-year fixed rate is now well over three percentage points higher than a year ago, and both purchase and refinance applications were down 38 percent and 86 percent over the year, respectively.” 

Added Kan: “With rates at these high levels, the ARM share rose to 12.8 percent of all applications, which was the highest share since March 2008. ARM loans continue to remain a viable option for borrowers who are still trying to find ways to reduce their monthly payments.”

The refinance share of mortgage activity decreased to 28.3 percent of total applications from 29.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 12.8 percent of total applications.

The FHA share of total applications increased to 13.6 percent from 13.5 percent the week prior. The VA share of total applications decreased to 10.7 percent from 10.9 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent 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 6.94 percent from 6.81 percent, with points decreasing to 0.95 from 0.97 (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 6.31 percent from 6.25 percent, with points increasing to 0.67 from 0.61 (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 6.63 percent from 6.61 percent, with points decreasing to 1.60 from 1.71 (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 6.09 percent from 6.12 percent, with points decreasing to 1.18 from 1.30 (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 increased to 5.65 percent from 5.56 percent, with points remaining at 0.90 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. 

ATHENS, Ga., Oct. 18, 2022, —FormFree^® today announced that mortgage lenders can now use AccountChek® to automate income assessment using Freddie Mac Loan Product Advisor^® (LPA^SM) asset and income modeler (AIM) for borrowers who are paid through ADP. 

AIM automates the assessment of borrower income using direct-source employer and payroll service data furnished by a Freddie Mac designated third-party service providers like FormFree. ADP is the first payroll provider eligible for automated verification of income (VOI) through AIM. AccountChek supports this expansion by enabling borrowers to authorize electronic verification of their ADP payroll data. 

FormFree is a leading provider of consumer-permissioned verification of asset (VOA) and verification of income and employment (VOI/E) data to the mortgage industry. The company’s flagship verification service, AccountChek, enables consumers to verify income and employment with more than 50 payroll providers and 100,000 employers. The company’s extensive payroll partnerships enable AccountChek to furnish payroll data and W-2s that meet Freddie Mac selling requirements.

“FormFree applauds Freddie Mac for its continuous innovation that helps lenders execute a simpler, more efficient loan origination process,” said FormFree Founder and CEO Brent Chandler. “Giving lenders the ability to automatically assess income dispersed by the world’s largest payroll provider will extend the convenience of digital VOI to an expansive cohort of homebuyers. We look forward to supporting Freddie Mac as it adds more payroll providers to AIM.” 

“Automation of a mortgage applicant’s income using payroll provider data has numerous benefits for our clients and their customers – it's really a win all around,” said Kevin Kauffman, Single-Family Vice President of Client & Partner Delivery at Freddie Mac. "Our partnership with FormFree is helping our clients reduce costs through process efficiencies, which can lead to savings for their customers, and it also delivers better risk management in all economic cycles.”

WASHINGTON, D.C. (October 18, 2022) – The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2022 shows mortgage applications for new home purchases decreased 13.2 percent compared from a year ago. Compared to August 2022, applications decreased by 7 percent. This change does not include any adjustment for typical seasonal patterns.

MBA estimates new single-family home sales, which has consistently been a leading indicator of the U.S. Census Bureau’s New Residential Sales report, is that new single-family home sales were running at a seasonally adjusted annual rate of 637,000 units in September 2022, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. 

“New home purchase activity declined in September as prospective homebuyers pulled back in response to higher mortgage rates, increased concern about an impeding recession, and a broader slowdown in home-price growth,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The average 30-year fixed mortgage rate increased almost a full percentage point in the last month, greatly reducing the purchasing power of many home shoppers. MBA’s estimate of new home sales declined 9 percent in September, partially reversing the 18 percent increase in August during that brief period when mortgage rates decreased.”

Added Kan, “The average loan size measured in the survey fell for the fifth consecutive month – after reaching a survey high in April 2022 – to $406,767.” 

The seasonally adjusted estimate for September is a decrease of 8.9 percent from the August pace of 699,000 units. On an unadjusted basis, MBA estimates that there were 52,000 new home sales in September 2022, a decrease of 10.3 percent from 58,000 new home sales in August. 

By product type, conventional loans composed 69.8 percent of loan applications, FHA loans composed 18.7 percent, RHS/USDA loans composed 0.3 percent and VA loans composed 11.2 percent. The average loan size of new homes decreased from $415,594 in August to $406,767 in September.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.