HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
Mortgage

Mortgage demand remains flat amid rate volatility

Mortgage application volume rose 0.2% last week

Mortgage demand remained relatively flat last week amid volatility in mortgage rates in recent weeks. 

The market composite index, a measure of mortgage loan application volume, rose a marginal 0.2% for the week ending August 5, according to the Mortgage Bankers Association (MBA). The market index is down 62% compared to the same week in 2021.  

The refinance index rose 4% from the previous week while the purchase index fell 1% in the same period. Mortgage demand remains weak compared to a year ago. The refi index fell 82% from the same week in 2021 and the purchase index was down 18.6%, according to the MBA.

“Mortgage applications were relatively flat, with a decline in purchase activity offset by an increase in refinance applications,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Despite mortgage rates on a downward trend following the Federal Reserve’s rate hike of 75 basis points on July 27, a cooling of the housing market is expected. Purchase mortgage rates dropped to below 5% last week, according to Freddie Mac, marking three consecutive weeks of decline. Leading up to the Fed’s July meeting, rates were on a roller coaster shooting back up to 5.50% in mid-July after falling to 5.3% earlier that month.

“The purchase market continues to experience a slowdown, despite the strong job market,” said Kan. “Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubts about the strength of the economy.”


Cracking the code on marketing to the realtor channel

As lenders adapt to a purchase-centered market, HousingWire spoke to Brian Boero, CEO of 1000watt, about opportunities to grow lenders’ effectiveness in the real estate agent and broker market.

Presented by: 1000watt

MBA’s estimate shows rates rising. The average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) rose to 5.47%, from the previous week’s 5.45%. Jumbo mortgage loans (greater than $647,200) increased to 5.09% from 5.06% in the same period. 

The MBA data shows the refinance share of all mortgage activity rose to 32% from the previous week’s 30.8% of total applications this week. 

The Federal Housing Administration’s (FHA) share of total applications increased to 12.1% from the previous week’s 11.9%. The Veterans Affairs’s (V.A.) share of applications also rose marginally to 10.9%, from 10.8% and the United States Department of Agriculture’s (USDA) share held steady at 0.6%. 

The share of adjustable-rate mortgages (ARM) applications decreased to 7.4% of total applications. According to the MBA, the average interest rate for a 5/1 ARM increased to 4.6% from 4.55% a week prior. 

The survey, conducted weekly since 1990, covers 75% of all U.S. retail, residential mortgage applications.

Leave a Reply

Your email address will not be published.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please