Mortgage applications decreased 3.7 percent from one week
earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications
Survey for the week ending May 26, 2023.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on
a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5
percent compared with the previous week. The Refinance Index decreased 7 percent from the previous
week and was 45 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent
compared with the previous week and was 31 percent lower than the same week one year ago.
“Inflation is still running too high, and recent economic data is beginning to convince investors that the
Federal Reserve will not be cutting rates anytime soon. Mortgage rates for conforming balance 30-year
loans were being quoted above 7 percent by some lenders last week, and the weekly average at 6.9
percent reached the highest level since last November,” said Mike Fratantoni, MBA’s SVP and Chief
Economist. “Application volumes for both purchase and refinance loans decreased last week due to these
higher rates. While refinance demand is almost entirely driven by the level of rates, purchase volume
continues to be constrained by the lack of homes on the market.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($726,200 or less) increased to 6.91 percent from 6.69 percent, with points increasing to 0.83 from 0.66
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased
from last week.
Click on graph for larger image.
The first graph shows the MBA mortgage purchase index.
According to the MBA, purchase activity is down 31% year-over-year unadjusted.