Mortgage News - 30% YOY Drop In Mortgage Applications

30% YOY Drop In Mortgage Applications

Mortgage News June 15, 2023

Based on the most recent Weekly Mortgage Applications Survey conducted by the Mortgage Bankers Association (MBA), there was a 1.4% decline in overall mortgage applications compared to the previous week.

This represents the fourth consecutive week where there was a decrease in the volume of mortgage applications.

Specifically, the Refinance Index decreased by 1% compared to the previous week and was 42% lower than the same week in the previous year. Additionally, the seasonally adjusted Purchase Index experienced a 2% decline from the previous week. The Purchase Index, on an unadjusted basis, experienced a notable 13% decline compared to the previous week, resulting in a 27% decrease from the corresponding week of the previous year.

According to Joel Kan, MBA’s VP and Deputy Chief Economist, mortgage rates fell slightly last week, but overall application activity decreased for the fourth consecutive week. The 30-year fixed rate dropped to 6.81%, which was 10 basis points lower than the previous week but still the second-highest rate of 2023. Total applications were over 30% lower compared to the previous year due to borrowers struggling with higher rates. The purchase activity was limited by reduced purchasing power caused by higher rates and a shortage of available homes for sale. However, government purchase applications experienced a smaller decline, reflecting an increased presence of first-time home buyers.

In terms of loan type, the FHA share of total applications increased to 13.2% from 12.7% the previous week, while the VA share rose to 12.5% from 12.1%. However, the USDA share slightly declined to 0.4% from 0.5%.

Regarding mortgage activity, the refinance share of total applications grew to 27.3% from 26.7% in the previous week. The share of adjustable-rate mortgages (ARMs) remained steady at 6.8% of total applications.

According to CoreLogic’s April 2023 Home Price Index (HPI) and HPI Forecast, single-family home prices in the US increased by 2% year-over-year, extending the streak of annual growth for the 135th consecutive month and marking six months of single-digit gains.

At the same time, affordability remains a challenge for aspiring homeowners. Black Knight’s report reveals that making principal and interest (P&I) payments on a median-priced home, with 20% down payment and a 30-year fixed-rate mortgage (FRM), now requires 34.2% of the median household income.

Need a loan officer directory in your area? Contact Jennifer Swanson at 260-223-9203 or Jennifer@SpecialtyContactDatabases.com

Mortgage News Blog

30% YOY Drop In Mortgage Applications

Contact Us/Order Samples