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MBA: Mortgage Applications Decrease in Latest Weekly Survey

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by Calculated Risk on 5/18/2022 07:00:00 AM

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

Mortgage applications decreased 11.0 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending May 13, 2022.

… The Refinance Index decreased 10 percent from the previous
week and was 76 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12
percent compared with the previous week and was 15 percent lower than the same week one year ago.

“Mortgage applications decreased for the first time in three weeks, as mortgage rates – despite declining
last week – remained over two percentage points higher than a year ago and close to the highest levels
since 2009. For borrowers looking to refinance, the current level of rates continues to be a significant
disincentive,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“Purchase applications fell 12 percent last week, as prospective homebuyers have been put off by the
higher rates and worsening affordability conditions. Furthermore, general uncertainty about the near-term
economic outlook, as well as recent stock market volatility, may be causing some households to delay
their home search.”

Added Kan, “These results were consistent with MBA’s May forecast released earlier this week, which now calls for fewer home sales and mortgage originations in 2022 compared to a year ago.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($647,200 or less) decreased to 5.49 percent from 5.53 percent, with points increasing to 0.74 from 0.73
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased
from last week.
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 December 2018.
The second graph shows the MBA mortgage purchase index


According to the MBA, purchase activity is down 15% year-over-year unadjusted.

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

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