Mortgage applications up amid rising rates

Additionally, the seasonally adjusted purchase index increased 8% from the previous week. Unadjusted, this comes out as a 6% increase from a week ago and a 10% decrease from the same week of the previous year.

“Mortgage rates continued to surge last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98% – the highest since November 2008 and the largest single-week increase since 2009,” said Joel Kan, associate vice president of economic and industry forecasting at the MBA. “All other loan types also increased by at least 20 basis points, influenced by the Federal Reserve’s 75-basis-point rate hike and commentary that more are coming to slow inflation. Mortgage rates are now almost double what they were a year ago, leading to a 77% drop in refinance volume over the past 12 months.”

“Purchase applications increased for the second straight week – driven mainly by conventional applications – and the ARM share of applications jumped back to over 10%,” added Kan. “However, purchase activity was still 10% lower than a year ago, as inventory shortages and higher mortgage rates are dampening demand. The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating.”

The refinance share of mortgage activity decreased to 29.7% of total applications from the 31.7% reported in the previous week, while the adjustable-rate mortgage (ARM) share of activity increased to 10.6% of total applications.

Moreover, the FHA share of total applications went up to 12% from 11.8% last week and the VA share decreased to 10.7% from 11.7%. The USDA share of total applications also decreased to 0.5% from 0.6% the week prior.