Latest News

MBA: Mortgage Applications Decreased in Latest Weekly Survey


by Calculated Risk on 2/01/2023 07:00:00 AM

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

Mortgage applications decreased 9.0 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending January 27, 2023.

… The Refinance Index decreased 7 percent from the previous
week and was 80 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 10 percent from one week earlier. The unadjusted Purchase Index increased 7 percent
compared with the previous week and was 41 percent lower than the same week one year ago.

“Mortgage rates declined for the fourth straight week and have now fallen almost 40 basis points over the
past month. Treasury yields were higher on average last week, while mortgage rates decreased, which
was a sign of a narrowing spread between the two,” said Joel Kan, MBA’s Vice President and Deputy
Chief Economist. “The spread between mortgage rates and the 10-year Treasury has been abnormally
wide since early 2022. Further narrowing of that spread is expected to put downward pressure on
mortgage rates in the coming months. Overall application activity declined last week despite lower rates,
which is an indication of the still volatile time of the year for housing activity. Purchase activity is expected
to pick up as the spring homebuying season gets underway, bolstered by lower rates and moderating
home-price growth. Both trends will help some buyers regain purchasing power.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($726,200 or less) decreased to 6.19 percent from 6.20 percent, with points decreasing to 0.65 from 0.69
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index declined sharply in 2022.
A month ago, the refinance index was at the lowest level since the year 2000, but it has rebounded a slightly as rates declined.
The second graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is down 41% year-over-year unadjusted. This is near housing bust levels.
Note: Red is a four-week average (blue is weekly).

Wednesday: FOMC Statement, Job Openings, ADP Employment, Construction Spending, ISM Mfg

Previous article

ADP: Private Employment Increased 106,000 in January

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News