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Last updated on December 26th, 2022 at 09:34 pm
A measure of mortgage loan application volume is the Market Composite Index, on a seasonally adjusted basis, the index decreased 11.4 % from the previous week.
The Index decreased 10 % on an unadjusted basis, in relation to the previous week. The Refinance Index decreased 11 % from the previous week but it was still 50 % higher than the same week a year ago.
In comparison to the previous week, the seasonally adjusted Purchase Index decreased 12 %. And the unadjusted Purchase Index decreased 8 % compared to last week and was higher by 7 % the same week a year ago.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, of the last 8 weeks mortgage rates have increased in six, with the benchmark 30-year fixed-rate climbing above 3 % last week to its highest level since September 2020.
Because of these higher rates, the overall refinance activity fell 11 % to its lowest level from December 2020 but remained 50 % higher than a year ago.
First Covid-19 then the severe winter weather in Texas affected many households and lenders, resulting in more than a 40 % drop in both purchase and refinance applications in the state last week.
Joel Kan added that the overall housing market in the country remains strong, with last week’s activity 7 % higher than a year ago.
In line with the growing home-price caused by very low inventory levels, the average loan size of purchase applications increased to a record $418,000.
Last week the refinance share of mortgage activity decreased from 69.3 % to 68.5 % of total applications. And the adjustable-rate mortgage (ARM) share of activity increased to 2.7 %.
The FHA share of total applications increased from 9.0 % to 11.2 % the previous week. And the same week the VA share of total applications decreased from 13.2 % to 11.9 %.
The USDA share of total applications decreased from 0.4% to 0.3 % the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased from 2.98 % to 3.08 %, with points increasing from 0.43 to 0.46 (including the origination fee) for 80 % loan-to-value ratio (LTV) loans. The effective rate increased from last week.
For 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250), the average contract interest rate increased from 3.11 % to 3.23 %, with points increasing from 0.35 to 0.43 (including the origination fee) for 80 % Loan to value loans.
The effective rate increased from the previous week.
For 30-year fixed-rate mortgages backed by the FHA, the average contract interest rate increased from 2.93 % to 3.00 %, with points decreasing from 0.37 to 0.33 (including the origination fee) for 80 % LTV loans.
The effective rate increased from last week.
For 15-year fixed-rate mortgages, The average contract interest rate increased from 2.47 % to 2.56 %, with points increasing from 0.36 to 0.40 (including the origination fee) for 80 % LTV loans. The effective rate increased a week ago.
The average contract interest rate for 5/1 ARMs is the same at 2.83 %, with points decreasing from 0.70 to 0.36 (including the origination fee) for 80 % LTV loans. The effective rate decreased compared to last week.
Reference Source: MBA
