Mortgage applications gain steam despite 14-year high rates
Read more: Long-term mortgage rate hits new high ahead of Fed meeting
MBA’s refinance index rose 10%, as well as the purchase index, which edged up 1% from a week earlier. Year over year, refinance applications were down by 83%, and purchase apps were 30% lower than a year ago.
“As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels, with purchase applications 30% lower and refinance activity down 83%,” Kan said. “The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”
Due to heightened volatility and worsening economic outlook, overall origination volume is expected to shrivel in 2022. MBA reported a 0.5% decline in its Mortgage Credit Availability Index in August. This means lenders are tightening their credit requirements in response to a shrinking mortgage market.
The refinance share of mortgage activity increased 2.3% to 32.5% week over week, while the adjustable-rate mortgage share of activity held steady at 9.1% of total applications. The FHA share of total applications decreased to 13.3% from 13.4% the week prior. The VA share of total applications decreased to 10.9% from 11.3%. The USDA share of total applications decreased to 0.6% from 0.7% the week before.
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