Mortgage applications down in latest weekly review

on Estimated risk per 07.12.2022 07:00:00

From MBA: Mortgage applications are down in latest weekly MBA survey

According to the Mortgage Bankers Association (MBA) Weekly Survey of Mortgage Applications for the week ended December 2, 2022, mortgage applications decreased by 1.9 percent from the previous week. Last week’s results include an adjustment for Thanksgiving observance.

… The refinancing index rose 5 percent from the previous week and was 86 percent lower than the same week a year ago. The seasonally adjusted buying index was down 3 percent from a week earlier.. The unadjusted buying index increased 31 percent from the previous week and was 40 percent lower than the same week a year ago.

“Mortgage applications are down 2% from the previous week’s Thanksgiving-adjusted results, even as mortgage rates continued to decline. Rates on most lending products declined, with 30-year fixed rates down 8 basis points to 6.41 percent after hitting 7.16 percent in October,” said Joel Kahn, MBA vice president and deputy chief economist. “The 30-year fixed rate was 73 basis points lower than a month ago, but still more than three percentage points higher than in December 2021. In addition, the rate of refinancing remained about 80 percent lower than a year ago.”

Kan added: “Purchasing activity slowed last week, with a decline in regular purchase applications partially offset by increases in FHA and USDA loan applications. The average loan size for purchase orders has dropped to $387,300, the lowest level since January 2021. This decline is consistent with slightly stronger government filings and a rapid cooling in house prices.”

Average interest rate under the contract 30-year fixed-rate mortgages with a matching loan balance ($647,200 or less) fell to 6.41 percent. from 6.49 percent, with the scores decreasing to 0.63 from 0.68 (including origination fees) for loans with a loan-to-value (LTV) ratio of 80 percent.
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Mortgage refinancing indexClick on the graph to enlarge the image.

The first chart shows the refinancing index since 1990.

Due to higher mortgage rates, the refinancing index has fallen sharply this year.

The refinancing index is close to its lowest level since 2000.

The second chart shows the MBA Mortgage Purchase Index.

Mortgage Buying Index

Buying activity is down 40% year-over-year, unadjusted, according to the MBA.

The buying index is 4% below the pandemic low and slightly above its lowest level since 2015.

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