Mortgage applications decreased 7.1% from one week earlier, for the week ending January 21, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
Key findings:
- The Market Composite Index decreased 7.1% on a seasonally adjusted basis from one week earlier.
- Unadjusted, the index decreased 6% compared with the previous week.
- The Refinance Index decreased 13% from the previous week—53% lower YoY.
- The seasonally adjusted Purchase Index decreased 2% from the previous week.
- The unadjusted Purchase Index increased 5% compared with the previous week—11% lower YoY.
- The refinance share of mortgage activity decreased to 55.8% of total applications from 60.3 percent the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 4.4% of total applications.
- The FHA share of total applications decreased to 8.6% from 9.3% the week prior.
- The VA share of total applications decreased to 9.9 from 10.0% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4 percent the week prior.
A look at interest rates:
Conforming loans
The average contract interest rate for 30-year fixed-rate mortgages with balances ($647,200 or less) increased to 3.72 percent from 3.64 percent, with points decreasing to 0.43 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
Jumbo loans
The average contract interest rate for 30-year fixed-rate mortgages with balances (greater than $647,200) increased to 3.56 percent from 3.54 percent, with points decreasing to 0.38 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
FHA-backed
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.69 percent from 3.64 percent, with points increasing to 0.61 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
15-year fixed-rate
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.00 percent from 2.95 percent, with points decreasing to 0.39 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
5/1 ARMs
The average contract interest rate for 5/1 ARMs increased to 3.18 percent from 3.04 percent, with points increasing to 0.33 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The takeaway:
“All mortgage rates in MBA’s survey continued to climb, with the 30-year fixed rate rising for the fifth consecutive week to its highest level since March 2020. The 30-year fixed rate is now 77 basis points higher than it was a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week. After almost two years of lower rates, there are not many borrowers left who have an incentive to refinance. Of those who are still in the market for a refinance, these higher rates are proving much less attractive to them.”
