Mortgage applications decreased 7.1% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending January 21, 2022.
On an unadjusted basis, the Market Composite Index decreased 6% compared with the previous week. The Refinance Index decreased 13% from the previous week and was 53% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index increased 5% compared with the previous week and was 11% lower than the same week one year ago.
“All mortgage rates in MBA’s survey continued to climb, with the 30-year fixed rate rising for the fifth consecutive week to its highest level since March 2020. The 30-year fixed rate is now 77 basis points higher than it was a year ago,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week. After almost two years of lower rates, there are not many borrowers left who have an incentive to refinance. Of those who are still in the market for a refinance, these higher rates are proving much less attractive to them.”
“The decline in purchase activity was led by a 5 percent drop in government applications, compared to a modest less than one percent decline in conventional applications,” adds Kan. “The relative weakness in government purchase activity continues to contribute to higher loan sizes. The average purchase loan size was $433,500, eclipsing the previous record of $418,500 set two weeks ago.”
The refinance share of mortgage activity decreased to 55.8% of total applications from 60.3% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.4% of total applications.
The FHA share of total applications decreased to 8.6% from 9.3% the week prior. The VA share of total applications decreased to 9.9% from 10% the week prior. The USDA share of total applications increased to 0.5% from 0.4% the week prior.
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