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MBA Expects Refinancing to Remain Depressed

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Mortgage application activity declined last week, again at least in part due to the shortening of holiday business weeks. The Mortgage Banking Association (MBA) said the market complex index, an indicator of loan application volumes, was down 1.7% on a seasonally adjusted basis from a week ago, including adjustments to take into account holidays on Independence Day. The amount of applications decreased by 13% on an unadjusted basis.

Refinancing index increased by 2% It was from the previous week, but it was 80 percent lower than the same week a year ago. The refinancing share of mortgage activity increased from 29.6% last week to 30.8% of the total application.

Purchase index fell 4% With seasonal adjustment, it was 14% lower than the previous week before adjustment. The index fell 18% from the same week’s level in 2021.

“”Mortgage rates According to Joel Kan, vice president of economics and industry forecasting at the MBA, there have been few changes, but applications have declined for the second straight week. “Purchase applications for both traditional and government loans continue to be weakened due to the much higher combination. Mortgage rates And the worsening economic outlook.

“After reaching a record high of $ 460,000 in March 2022, last week’s average purchase loan amount was $ 415,000, which is a potential slowdown in rising home prices and weak buying activity at market limits. It was lowered by that. ”

Mr. Kang added: “Last week, the increase in traditional and FHA refinancing led to a slight increase in refinancing applications. The overall refinancing index remained 5% below the average level reported in June. 30-year fixed rates 265 basis points higher than a year ago, Refinancing applications are expected to remain depressed.. “

Other highlights from the MBA’s Weekly Mortgage Application Survey.

  • FHA’s share of the total application decreased from 12.0% last week to 11.7%, and VA’s share increased from 11.1% to 11.2%. The USDA application fell to a 0.5% share, down 0.1 points from the previous week.
  • Loans have declined over the past five months, but have increased slightly last week. Overall loans increased from $ 369,100 to $ 372,700, with an average home purchase of $ 415,200 higher than last week by $ 10,000.
  • The average contract interest rate for a 30-year fixed rate mortgage (FRM) with a matching loan balance remained at 5.74%, with points dropping from 0.65 to 0.59.
  • The 30-year FRM rate, which has a balance higher than the compliance rate, dropped from 5.28% to 5.25%. Points are reduced from 0.44 to 0.38.
  • The average interest rate of FRM for 30 years with the support of FHA was 5.49%, which was 1.08 points. The previous interest rate was 5.60%, which was 0.89 points.
  • 5/1 Floating rate mortgage (ARM) average contract rates rose from 9 basis points to 4.71% and points rose from 0.72 to 0.77.
  • The share of ARM activity increased to 9.6% of the total application, up 0.1 points from a week ago.

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