The Market Composite Index, a measure of mortgage loan application volume, decreased 6.3% on a seasonally adjusted basis from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 1.
The Refinance Index decreased 10% from the previous week and was 62% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3% from one week earlier. The unadjusted Purchase Index decreased 3% compared with the previous week and was 9% lower than the same week one year ago.
“Mortgage application volume continues to decline due to rapidly rising mortgage rates, as financial markets expect significantly tighter monetary policy in the coming months,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The 30-year fixed mortgage rate increased for the fourth consecutive week to 4.90 percent and is now more than 1.5 percentage points higher than a year ago. As higher rates reduce the incentive to refinance, application volume dropped to its lowest level since the spring of 2019.”
The refinance share of mortgage activity decreased to 38.8% of total applications from 40.6% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8% of total applications. The FHA share of total applications decreased to 9.2% from 9.3% the week prior.
“The refinance share of all applications dipped to 38.8 percent, down from 51 percent a year ago,” adds Kan. “The hot job market and rapid wage growth continue to support housing demand, despite the surge in rates and swift home-price appreciation. However, insufficient for-sale inventory is restraining purchase activity. Additionally, the elevated average purchase loan size, and steeper 8 percent drop in FHA purchase applications, are both indicative of first-time buyers being disproportionately impacted by supply and affordability challenges.”
The VA share of total applications increased to 9.8% from 9.5% the week prior. The USDA share of total applications remained unchanged at 0.5% from the week prior.
Photo by Trinity Nguyen on Unsplash