Mortgage Bankers Association (MBA) reports that mortgage applications decreased 5.4% on a seasonally adjusted basis from one week earlier, according to data from its Weekly Mortgage Applications Survey for the week ending July 1. This week’s results include a holiday adjustment to account for early closings the Friday before Independence Day.
On an unadjusted basis, the Market Composite Index increased 6% compared with the previous week. The Refinance Index decreased 8% from the previous week and was 78% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4% from one week earlier. The unadjusted Purchase Index increased 7% compared with the previous week and was 17% lower than the same week one year ago.
“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower. Mortgage rates have increased sharply thus far in 2022 but have fallen 24 basis points over the past two weeks, with the 30-year fixed rate at 5.74 percent,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed,” continues Kan. “Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance.”
The refinance share of mortgage activity decreased to 29.6% of total applications from 30.3% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.5% of total applications.
The FHA share of total applications remained unchanged at 12% from the week prior. The VA share of total applications decreased to 11.1% from 11.2% the week prior. The USDA share of total applications remained unchanged at 0.6% from the week prior.