Mortgage application volume fell 1.3% during the week ended September 22, as the average rate for a 30-year, fixed-rate mortgage increased to 7.41%, the highest level since December 2000, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances decreased 1% from the previous week and were down 21% compared with the same week one year earlier.
Applications for purchases decreased 2% and were down 27% from a year ago.
“Mortgage rates moved to their highest levels in over 20 years as Treasury yields increased late last week,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The 30-year fixed mortgage rate increased to 7.41 percent, the highest rate since December 2000, and the 30-year fixed jumbo mortgage rate increased to 7.34 percent, the highest rate in the history of the jumbo rate series dating back to 2011.”
“Based on the FOMC’s most recent projections, rates are expected to be higher for longer, which drove the increase in Treasury yields,” Kan adds. “Overall applications declined, as both prospective homebuyers and homeowners continue to feel the impact of these elevated rates. The purchase market, which is still facing limited for-sale inventory and eroded purchasing power, saw applications down over the week and 27 percent behind last year’s pace. Refinance activity was down over 20 percent from last year and accounted for approximately one third of applications. Many homeowners have little incentive to refinance.”
The refinance share of mortgage activity increased to 31.9% of total applications, up from 31.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 7.5% of total applications.
Photo: David Kristianto