Big Move in Mortgage Applications

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Big Move in Mortgage Applications

Feb 9, 2023 | News | 0 comments

A mortgage application volume decrease of 9% from the prior week ended Jan. 27, 2023 is reported by the Mortgage Bankers Association (MBA).

According to the Market Composite Index, which measures the volume of mortgage loan applications, the index fell by 6% from the previous week. There was a 7% drop in the Refinance Index from the week before and an 80% drop from a year ago.

Purchases decreased 10% from a week earlier, according to the seasonally adjusted Purchase Index. In comparison to last week, the unadjusted Purchase Index rose 7% while in the same week a year ago, it was 41% lower.

The MBA also highlighted the following key data points:

In the previous week, 31.9% of mortgage activity was from refinances, which dropped to 31.2% this week. There was an increase in the number of applications for adjustable-rate mortgages (ARMs) to 6.7% of total applications.

As a percentage of total applications, FHA accounts for 12.0%, up from 11.9% the previous week. There was a decrease in the VA share of total applications from 13.0% to 11.9%. There was no change from the week before in the USDA share of total applications at 0.6%.

In the 30-year fixed-rate mortgage market, the average contract interest rate decreased to 6.19% from 6.20% for conforming loan balances under $726,200 with points falling from 0.69 to 0.65 for loans with an 80% loan-to-value ratio (LTV). Compared to last week, there was a decrease in the effective rate.

Compared with the previous year, the average 30-year fix-rate mortgage rate for jumbo loans (over $726,200) increased to 5.99% from 5.92%, with points increasing to 0.48 from 0.41 (including the origination fee) for loans with 80% LTV. This week’s effective rate was higher than last week’s.

FHA-backed 30-year fixed-rate mortgage rates decreased by 6.18% from 6.22%, and points decreased to 0.99 from 1.10 for 80% LTV loans (including origination fee). From last week, the effective rate decreased.

15-year fixed-rate loan at 80% LTV had an average interest rate of 5.50% as compared to 5.54%. Points increased to 0.73 from 0.51 (including origination fee). Over the past week, the effective rate has increased.

Average 5/1 ARM interest rates for 80% LTV loans decreased from 5.44% to 5.38%, with points remaining at 0.83 (including origination fees). From last week, the effective rate decreased.