The volume of mortgage applications fell sharply last week, the second drop of more than 6 percent over the past three weeks. Refinancing fell for the fourth week in a row, and the volume of purchase requests also declined. The Mortgage Bankers Association (MBA) said its composite market index, which measures volume, was down 6.3% on a seasonally adjusted basis from the previous week and 6.0% before adjustment.
Refinancing led the way. This clue down 7 percent compared to the level of the previous week and was 22% lower than the same week a year ago. Refinancing has historically dominated the market, although this share of claims declined to 63.3% of total claims, from 63.9% the week before.
The buy index was 5 percent lower week to week on an adjusted and unadjusted basis. It was down 12% from the same week a year ago.
Refi index vs 30 years Fixed
Buy index vs 30 years fixed
“Refinancing requests fell for the fourth week as rates rose, bringing the refinancing index to its lowest level since July 2021. The 30-year fixed rate rose 20 basis points over the past month and reached 3.23% last week – the highest since April 2021. The 15-year fixed rate rose to 2.54%, which is the highest since July, ”said Joel Kan, vice president Associate of the MBA’s economic and industry forecast. “Purchasing activity declined and was 12% lower than a year ago, within the annual comparison range it has been over the past six weeks. Insufficient housing supply and high house price growth continue to limit options for potential buyers. ”
The FHA share of total claims remained unchanged at 10.2% and the VA share increased to 10.4% from 10.2% the previous week. USDA’s share fell from 0.4% to 0.5%. The average loan size decreased from $ 6,000 to $ 335,000 and the size of a purchase loan increased from $ 409,400 to $ 402,900.
Theaverage contractual interest rate for 30-year fixed rate mortgages (FRMs) with loan balances equal to or less than the compliant limit of $ 548,250, increased from 3.23% to 3.18%, with points decreasing to 0, 35 of 0.37. The effective rate rose to 3.33%.
FRM Jumbo at 30 years, loans with balances above the compliant limit had an average rate of 3.26%, compared to 3.22%, with points going from 0.29 to 0.33. The effective rate was 3.35%.
The average FHA-backed 30-year FRM rate declined to 3.17 percent from 3.20 percent. The points fell from 0.31 to 0.32 and the effective rate fell to 3.26%.
The average contractual interest rate for 15-year FRMs increased 6 basis points to 2.54% and remained unchanged at 0.29. The effective rate rose to 2.61%.
The average contractual interest rate for 5/1 Adjusted Rate Mortgages (ARMs) increased from 3.08% to 3.09%, with points falling from 0.26 to 0.30 and the effective rate rose to 3.20%. ARM’s business share declined to 3.3 percent of total claims, from 3.04 percent a week earlier.
The MBA Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all personal loan applications in the United States. The base period and value of all indices are March 16, 1990 = 100 and interest rate information is based on loans with 80% loan-to-value ratio and points that include origination charges .
the last MBA Forbearance and call volume survey brings the total number of forbidden loans as of October 10 to 1.1 million. This represents a drop of 34 basis points from the previous week to a 2.62 percent share of active mortgages. By stages, 14.8% of these loans are at the initial stage of the forbearance plan, 75.5% are in an abstention extension and 9.7% are in receipt of abstention.
The share of Fannie Mae and Freddie Mac loans in forbearance fell 16 basis points to 1.05% and the number of Ginnie Mae (FHA and VA) loans declined 17 basis points to 2.77%. The forbearance share for portfolio loans and private label securities (PLS) decreased by 108 basis points to 5.34%. The percentage of renegotiated loans in the service portfolios of independent mortgage banks (IMBs) fell 25 basis points to 2.57. Those in the depository services portfolios fell 53 basis points to 2.16%.
“Abstention outflows continued at an even faster pace, leading to a 34 basis point drop in the overall abstention rate. The decline was apparent for all types of service providers and investors, ”said Mike Fratantoni, senior vice president and chief economist of MBA. “There has been a substantial drop of over a percentage point in the forbearance rate for portfolio loans and PLS loans, which include loans held for investment, loans managed for private investors. and government loans that were purchased from the Ginnie Mae Pools for the purpose of modifying them and then re-securing them into the Ginnie Mae Pools. “
Fratantoni added: “We are now at 1.1 million homeowners in abstention from a peak of 4.3 million homeowners in June 2020. Positive employment and salary outlook, continued appreciation in house prices and the availability of several loan financing options are factors. which will facilitate the transition of many owners from forbearance. “
MBA’s latest forbearance and call volume survey covers the period October 4-10 and accounts for 73 percent of the first mortgage services market of 36.7 million loans.