Mortgage applications trend upward – MBA

Recent survey reveals this week's trend

Mortgage applications trend upward – MBA

The number of mortgage applications has continued to trend upward, according to the latest survey from the Mortgage Bankers Association (MBA).

MBA’s latest weekly mortgage application survey revealed that mortgage applications for the week ending January 14, 2022 increased by 2.3% from one week earlier.

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Meanwhile, the market composite index, a measure of mortgage loan application volume, also increased by 2.3% on a seasonally adjusted basis and by 3% on an unadjusted basis from one week earlier. MBA also revealed that the refinance index decreased 3% from the previous week and was 49% lower than the same week one year ago.

Broken down, the refinance share of mortgage activity decreased to 60.3% of total applications from 64.1% the previous week; the adjustable-rate mortgage (ARM) share of activity increased to 3.8% of total applications; the FHA share of total applications decreased to 9.3% from 9.9% the week prior; the VA share of total applications decreased to 10.0% from 11.4%; and the USDA share of total applications remained unchanged from 0.4% the week prior.

“Mortgage rates hit their highest levels since March 2020, leading to the slowest pace of refinance activity in over two years,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “The 30-year fixed rate reached 3.64% and has increased more than 30 basis points over the past two weeks. FHA and VA refinance declines drove most of the refinance slowdown. Despite the increase in rates, purchase applications jumped almost 8%, with conventional purchase applications accounting for much of the stronger activity. The average loan size for a purchase application set a record at $418,500. The continued rise in purchase loan application sizes is driven by high home-price appreciation and the lack of housing inventory on the market – especially for entry-level homes. The slower growth in government purchase activity is also contributing to the larger loan balances and suggests that prospective first-time buyers are struggling to find homes to buy in their price range.”