The increase in mortgage applications last week was short-lived, as purchase applications fell this week, down 1.3% from one week earlier when we saw a temporary increase of 5.4%. This is according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending September 22, 2023.
Here’s a look at this week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3% 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 1% from the previous week and was 21% lower than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 2% from one week earlier.
- The unadjusted Purchase Index decreased 2% compared with the previous week and was 27% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 31.9% of total applications from 31.6% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 7.5% of total applications.
- The FHA share of total applications decreased to 14.1% from 14.2% the week prior.
- The VA share of total applications decreased to 10.9% from 11.0% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.41%, the highest level since December 2000, from 7.31%, with points decreasing to 0.71 from 0.72 (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 $726,200) increased to 7.34%, the highest level since the series’ inception in January 2011, from 7.32%, with points decreasing to 0.78 from 0.80 (including the origination fee) for 80% 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 7.16%, the highest level since March 2002, from 7.08%, with points increasing to 0.96 from 0.92 (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 6.73%, the highest level since July 2001, from 6.62%, with points increasing to 1.17 from 1.08 (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 6.47% from 6.42%, with points increasing to 1.58 from 1.10 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage rates moved to their highest levels in over 20 years as Treasury yields increased late last week. The 30-year fixed mortgage rate increased to 7.41%, the highest rate since December 2000, and the 30-year fixed jumbo mortgage rate increased to 7.34%, the highest rate in the history of the jumbo rate series dating back to 2011,” said Joel Kan, MBA’s vice president and deputy chief economist. “Based on the FOMC’s most recent projections, rates are expected to be higher for longer, which drove the increase in Treasury yields. Overall applications declined, as both prospective homebuyers and homeowners continue to feel the impact of these elevated rates. The purchase market, which is still facing limited for-sale inventory and eroded purchasing power, saw applications down over the week and 27% behind last year’s pace. Refinance activity was down over 20% from last year and accounted for approximately one third of applications. Many homeowners have little incentive to refinance.”
