Residential Real Estate News
Mortgage Applications Dip 7 Percent in Early February
According to the Mortgage Bankers Association's latest Weekly Mortgage Applications Survey for the week ending February 3, 2023, U.S. mortgage applications increased 7.4 percent from one week earlier.
The Market Composite Index, a measure of mortgage loan application volume, increased 7.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 8 percent compared with the previous week.
The Refinance Index increased 18 percent from the previous week and was 75 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 37 percent lower than the same week one year ago.
"Applications rose last week as the 30-year fixed mortgage rate inched lower to 6.18 percent, its fifth consecutive weekly decline. The 30-year fixed rate is almost a percentage point below its recent high of 7.16 percent in October 2022," said Joel Kan, MBA's Vice President and Deputy Chief Economist. "Both purchase and refinance applications increased last week and have shown gains in three of the past four weeks because of lower rates. Overall applications remained 58 percent lower than a year ago and rates are still significantly higher, however, this week's results are a step in the right direction. Purchase activity that was put on hold last year due to the quick runup in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market."
Added Kan, "The average loan size on a purchase application increased to $428,500 - the largest average since May 2022. This increase is a sign that the recent upward trend in purchase activity remains skewed toward larger loan sizes and less first-time homebuyer activity, as entry level housing remains undersupplied, and buyers struggle with affordability in many markets."
The refinance share of mortgage activity increased to 33.9 percent of total applications from 31.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications.
The FHA share of total applications decreased to 11.9 percent from 12.0 percent the week prior. The VA share of total applications increased to 13.4 percent from 11.9 percent the week prior. The USDA share of total applications remained unchanged at 0.6 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.18 percent from 6.19 percent, with points decreasing to 0.64 from 0.65 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 5.96 percent from 5.99 percent, with points increasing to 0.55 from 0.48 (including the origination fee) for 80 percent LTV loans.
The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.14 percent from 6.18 percent, with points decreasing to 0.88 from 0.99 (including the origination fee) for 80 percent LTV loans.
The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.64 percent from 5.50 percent, with points decreasing to 0.63 from 0.73 (including the origination fee) for 80 percent LTV loans.
The effective rate increased from last week. The average contract interest rate for 5/1 ARMs increased to 5.56 percent from 5.38 percent, with points decreasing to 0.80 from 0.83 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
