A shortened holiday week and rates still in not-so-favorable ranges for many borrowers forced overall mortgage application volume to dip slightly week-over-week, as the Mortgage Bankers Association (MBA) reported mortgage application volume dropping 0.8% week-over-week, according to the association’s latest Weekly Mortgage Applications Survey for the week ending November 25, 2022.
And despite a slight slide in mortgage rates, the MBA’s Refinance Index decreased 13% from the previous week, and was 86% lower than the same week just one year ago.
The seasonally adjusted Purchase Index increased 4% from one week earlier, as the unadjusted Purchase Index decreased 31% compared with the previous week, and was 41% lower than the same week one year ago.
“Mortgage rates declined again last week, following bond yields lower. The 30-year fixed mortgage rate decreased to 6.49%, and has now fallen 57-basis points over the past four weeks. Additionally, mortgage rates for most other loan types declined,” said Joel Kan, MBA’s VP and Deputy Chief Economist. “The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes. Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity. Refinance applications fell another 13%, and the refinance share of applications was at 26%. Both measures were at their lowest levels since 2000.”
With rates dropping slightly, most found them still unattractive enough for a refi, as the refinance share of mortgage activity decreased to 26.1% of total applications, down from 28.4% the previous week. Those fearing another rate hike by the Federal Reserve has forced the adjustable-rate mortgage (ARM) share of activity upward as it increased to 9% of total applications.
By loan type, the FHA share of total applications dipped to 12.2% from 13.4% the week prior, as the VA share of total applications increased to 11.2% from 10.5% the week prior. The USDA share of total applications fell slightly to 0.5% from 0.6% the week prior.