Mortgage applications are down 2.7% from the previous two weeks, according to the MBA’s weekly mortgage application survey data for the week ending December 31, 2021. The results include adjustments to take into account holidays.
The Market Composite Index, a measure of the volume of mortgage loan applications, was down 2.7% on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the index is down 32% compared to the previous two weeks. The holiday-adjusted refinancing index is down 2% from the previous two weeks and was 40% lower than the same week a year ago. The seasonally adjusted buying index is down 4% from two weeks earlier. The unadjusted buying index is down 32% compared to the previous two weeks and was 12% lower than the same week a year ago.
“Mortgage rates have continued to rise over the past two weeks, as markets maintain an optimistic view of the economy,” comments Joel Kahn, associate vice president of economic and industrial forecasting at the MBA. “The 30-year fixed rate increased 6 basis points to 3.33 percent – the highest level since April 2021. Higher rates to close out 2021 caused refinancing activity to decline by 2.2 percent.”
Kan continues: “Demand for refinancing continues to shrink, with many borrowers refinancing in 2020, and early 2021 — when mortgage rates were about 40 basis points lower.” It also finished the public purchase market slower, with the last week coming in at its weakest level since October 2021. Although average loan sizes were lower, house prices are still at very high levels. Despite supply and affordability challenges, 2021 was a record year for procurement facilities. The MBA expects 2022 to be even stronger, with total buying activity reaching $1.74 trillion.”
While index changes have been calculated for the previous two weeks, only the synthetic metrics and averages are shown relative to the previous week.
The share of refinancing in mortgage activity increased to 65.4% of total applications from 63.9% in the previous week. The share of adjustable-rate mortgage (ARM) activity decreased to 3.3% of total applications.
The FHA share of total applications increased to 9.2% from 8.5% in the previous week. VA’s share of total applications fell to 11.3% from 11.4% in the previous week. The USDA’s share of total orders remained unchanged from 0.4% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with matching loan balances ($548,250 or less) increased to 3.33% from 3.31%, with points increasing to 0.48 from 0.38 (including creation fees) vs. 80% loan to loan value ratio (LTV). Actual rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with hefty loan balances (greater than $548,250) decreased to 3.31% from 3.35%, with points increasing to 0.38 from 0.34 (including origination fees) for loans Long term 80%. Effective rate decreased from last week.
The average contract interest rate for 30-year FHA-backed fixed-rate mortgages increased to 3.40% from 3.39%, with points increasing to 0.42 from 0.37 (including creation fees) for 80 percent long-term loans. %. Actual rate increased from last week.
The average interest rate on 15-year fixed-rate mortgages remained unchanged at 2.60%, with a points increase to 0.31 from 0.29 (including creation fee) for 80% long-term loans. Actual rate increased from last week. The average 5/1 ARM contract interest rate decreased to 2.45% from 2.74%, with points increasing to 0.33 from 0.22 (including origination fee) for 80% long-term loans. Effective rate decreased from last week.
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