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MBA: Mortgage Applications Decrease in Latest Weekly Survey


by Calculated Risk on 3/30/2022 07:00:00 AM

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

Mortgage applications decreased 6.8 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending March 25, 2022.

… The Refinance Index decreased 15 percent from the previous
week and was 60 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent
compared with the previous week and was 10 percent lower than the same week one year ago.

“Mortgage rates jumped to their highest level in more than three years last week, as investors continue to
price in the impact of a more restrictive monetary policy from the Federal Reserve. Not surprisingly,
refinance application volume declined further, as fewer borrowers have an incentive to apply at rates that
are significantly higher than a year ago. Refinance application volume is now 60 percent below last year’s
levels, in line with MBA’s forecast for 2022,” said Mike Fratantoni, MBA Senior Vice President and Chief
Economist. “Even with the ongoing climb in rates, purchase application volumes were little changed last
week. This is particularly auspicious, as we are now in the beginning of the spring homebuying season,
and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but
also an ongoing shortage of homes on the market. Given these hurdles, it appears to be promising news
that purchase application volume has not declined, as many potential buyers are likely feeling the
squeeze in their purchasing power from the jump in rates.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($647,200 or less) increased to 4.80 percent from 4.50 percent, with points decreasing to 0.56 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 May 2019.
The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 10% year-over-year unadjusted.

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

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