Mortgage applications revert to downward trend

Mike Fratantoni, senior vice president and chief economist at the MBA, said the association had forecast mortgage rates to trend higher through the course of 2022.

“Rates on 30-year conforming mortgages jumped by 23 basis points last week, the largest weekly increase since March 2020. The jump in rates comes as markets moved to price in a much faster pace of rate hikes, as well as expectations of fewer MBS purchases from the Federal Reserve,” Fratantoni said. “With mortgage rates now at 4.5%, compared to rates at or below 3% not that long ago, it is no surprise that refinance volume has dropped by more than 50% compared to this time last year.”

Likewise, both refinance and purchase applications were also 14% and 1% lower than the previous week, respectively. Both percentages are significantly lower compared to the same time last year.

The refinance share of mortgage activity also decreased to 44.8% from 48.4% the previous week. Meanwhile, the adjustable-rate mortgage share increased to 6.4% of total applications.