MBA: Mortgage Applications Decrease in Latest Weekly Survey

… The Refinance Index decreased 11 percent from the previous
week and was 84 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 0.4 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent
compared with the previous week and was 29 percent lower than the same week one year ago.

“Applications for both purchase and refinances declined last week as mortgage rates continued to
increase to multi-year highs following more aggressive policy measures from the Federal Reserve to bring
down inflation. Additionally, ongoing uncertainty about the impact of the Fed’s reduction of its MBS and
Treasury holdings is adding to the volatility in mortgage rates. The 30-year fixed rate was 6.52 percent, its
highest level since mid-2008. After a brief pause in July, mortgage rates have increased more than a
percentage point over the past six weeks,” said Joel Kan, MBA’s Associate Vice President of Economic
and Industry Forecasting. “With rates now more than double what they were a year ago, the pace of
refinancing is running at a 22-year low and last week was more than 80 percent below last year’s level.
Similarly, purchase activity was 29 percent lower than a year ago, with higher rates and economic
uncertainty weighing on buyers’ decisions.”

Added Kan, “With the recent jump in rates, the ARM share reached 10 percent of applications and almost
20 percent of dollar volume. ARM loans remain a viable option for qualified borrowers in this rising rate
environment.”

…
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($647,200 or less) increased to 6.52 percent from 6.25 percent, with points increasing to 1.15 from 0.71
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added