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MBA: Mortgage Applications Increase in Latest Weekly Survey


by Calculated Risk on 1/11/2023 07:00:00 AM

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

Mortgage applications increased 1.2 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending January 6, 2023.

… The Refinance Index increased 5 percent from the previous
week and was 86 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 1 percent from one week earlier. The unadjusted Purchase Index increased 47 percent
compared with the previous week and was 44 percent lower than the same week one year ago.

“Mortgage rates declined last week as markets reacted to data showing a weakening economy and
slowing wage growth. All loan types in the survey saw a decline in rates, with the 30-year fixed rate falling
to 6.42 percent. Purchase applications continued to be hampered by broader weakness in the housing
market and declined slightly over the week, with the index slipping to its lowest level since 2014,” said
Joel Kan, MBA’s Vice President and Deputy Chief Economist. “There was an increase in refinance activity
as a result of the 16-basis-point decline in rates, as both conventional and government refinance
applications increased. However, the overall pace of refinance applications was lower than November
and December’s 2022 averages, and over 80 percent lower than a year ago. Refinances were about 30
percent of all applications last week — well below the past decade’s average of 58 percent.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($647,200 or less) decreased to 6.42 percent from 6.58 percent, with points remaining at 0.73 (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.
The previous week the refinance index was at the lowest level since the year 2000.
The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 44% year-over-year unadjusted.
The purchase index is 13% below the pandemic low and at the lowest level since February 2015.

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

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