The Market Composite Index, a measure of mortgage loan application volume, increased 0.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4% compared with the previous week. The Refinance Index decreased 1% from the previous week and was 16% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2% from one week earlier. The unadjusted Purchase Index increased 2% compared with the previous week and was 10% lower than the same week one year ago.
“Mortgage rates reached their highest level since June 2021, but application activity changed little this week. An increase in home purchase applications offset a slight decline in refinances,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The increase in purchase applications was welcome news but was primarily driven by a 2 percent gain in conventional purchase applications, which kept the average loan size elevated.”
“The 30-year fixed rate reached 3.18 percent last week and has risen 15 basis points over the past month, resulting in an 11 percent drop in refinance applications during this time,” adds Kan. “Government refinance applications fell over 3 percent last week, driven by a decline in FHA refinances and an 8-basis-point increase in the average FHA mortgage rate. We continue to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive.”
The refinance share of mortgage activity decreased to 63.9% of total applications from 64.5% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.4 percent of total applications.