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Mortgage Applications Decrease in Latest MBA Weekly Survey

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. 

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