Mortgage applications have been making logical moves recently with higher rates causing a sharp deceleration in refinance activity. Purchases are off their recent highs as well, but in much better shape in the bigger picture.
In this week’s report, released by the Mortgage Bankers Association (MBA) today, mortgage rates moved up yet again, setting another new multi-year high. It’s no surprise, then, to see applications fall further, but it’s definitely a surprise to see refinances move higher, even if only microscopically.
That means that purchase applications were responsible for dragging the average down last week. In both cases, the moves were modest, and each index remains at its lowest levels since the start of the pandemic. Here’s a quick rundown:
- Overall applications
- seasonally adjusted = down 0.7%
- not seasonally adjusted = up 1%
- Refi applications
- Purchase Applications
- seasonally adjusted = down 2%
- non seasonally adjusted = up 1%
- Market share
- Refinance = 49.9
- Purchase = 50.1
- FHA share = 8.6 vs 8.7% previously
- VA share = 10.2 vs 9.9% previously
- Avg 30yr fixed rate = 4.15% vs 4.06% previously
The interest rate story is very interesting at the moment as the first two days of the current week saw one of the largest drops in well over a decade. Prospective refinances thus had much more incentive to get off the fence, but any such effect would not show up until next week’s report.