Mortgage application volume tanked 17% last week as rates increased sharply, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances plummeted 26% compared with the previous week but were still up 111% compared with the same week one year ago.
Applications for purchases decreased 7% compared with the previous week but were up 7% compared with the same week one year ago.
“Mortgage rates moved higher for the third consecutive week, with the 30-year fixed rate increasing to 6.52 percent, its highest level since August,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The recent uptick in rates has put a damper on applications.
“Refinance applications fell 26 percent to their lowest level since August, with comparable drops in both conventional and government refinances,” Kan says. “This pushed the refinance share of applications back below 50 percent for the first time in over a month. Furthermore, purchase applications also decreased but notably remain 7 percent higher than a year ago.
“Demand is holding up to an extent for prospective first-time buyers,” he adds. “FHA purchase applications were little changed despite the increase in rates, as some first-time homebuyers remain in the market because of improving housing inventory conditions.”
The refinance share of mortgage activity decreased to 46.5% of total applications, down from 52.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.9% of total applications.
The average rate for a 30-year fixed-rate mortgage increased to 6.52%, up from 6.36% the previous week.
Photo: Scott Graham