Mortgage applications suffer slump

Numbers drop from previous week – in double figures

Mortgage applications suffer slump

Mortgage applications saw a decline of 10.6% from the previous week, according to the data revealed by the Mortgage Bankers Association (MBA).

In its Weekly Mortgage Applications Survey for the week ending February 16, the Market Composite Index on an unadjusted basis had declined by 8%.

“Mortgage rates moved back above 7% last week following news that inflation picked up in January, dimming hopes of a near term rate cut,” said Mike Fratantoni, MBA’s SVP and chief economist.

“Mortgage applications dropped as a result with a larger decline in refinance applications. Potential homebuyers are quite sensitive to these rate changes, as affordability is strained with both higher rates and higher home values in this supply-constrained market.”

Meanwhile, the Refinance Index also decreased by 11%, while remaining 0.1% higher year-over-year. The seasonally adjusted Purchase Index also declined by 10%, while it decreased by 6% on an unadjusted basis.

The refinance share of mortgage activity decreased to 32.6% of total applications. In the previous week, the number was 34%. The adjustable-rate mortgage (ARM) share of activity saw an increase to 7.4% of total applications.

The FHA share of total applications also went down to 13.2%, while the VA share of total applications reached 12.1%. Meanwhile, the USDA share of total applications went up by 0.1 basis point to 0.5%.

Thirty-year fixed-rate mortgages with conforming loan balances’ average contact interest rate went up to 7.06%, while those with jumbo loan balances saw a rise to 7.16%. Those that were backed by the FHA saw an increase to 6.91%.

The MBA survey covers 75% of all retail residential mortgage applications in the US.

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