Mortgage applications decreased 7.7 percent from Feb. 3 to Feb. 10, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
The Refinance Index decreased 13 percent from the previous week and was 76 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week ago. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 43 percent lower than the same week one year ago.
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time. After five straight weeks of decreases, the 30-year fixed rate increased by 21 basis points to 6.39 percent,” says Joel Kan, MBA’s vice president and deputy chief economist.
“Purchase applications dropped to their lowest level since the beginning of this year and were more than 40 percent lower than a year ago,” he adds. “Potential buyers remain quite sensitive to the current level of mortgage rates, which are more than two percentage points above last year’s levels and have significantly reduced buyers’ purchasing power.”
The refinance share of mortgage activity decreased to 32 percent of total applications, from 33.9 percent the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.9 percent of total applications.
The FHA share of total applications increased to 12.6 percent from 11.9 percent the week prior, while the VA share of total applications decreased to 12.6 percent from 13.4 percent. The USDA share of total applications remained unchanged at 0.6 percent.