Mortgage application volume nosedived 11.4% during the week ended Feb. 19, due mainly to higher rates, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances fell 11% compared with the previous week while applications for purchases decreased 12%.
Year over year, applications for refinances were up 50% while applications for purchases were up 7%.
On an unadjusted basis, total volume fell 10% compared with the previous week.
“Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed rate last week climbing above three percent to its highest level since September 2020,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “As a result of these higher rates, overall refinance activity fell 11 percent to its lowest level since December 2020, but remained 50 percent higher than a year ago. Additionally, the severe winter weather in Texas affected many households and lenders, causing more than a 40 percent drop in both purchase and refinance applications in the state last week.
“The housing market in most of the country remains strong, with activity last week seven percent higher than a year ago,” Kan adds. “The average loan size of purchase applications increased to a record $418,000, in line with the accelerating home-price growth caused by very low inventory levels.”
The refinance share of mortgage activity decreased to 68.5% of total applications, down from 69.3% percent the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 2.7% of total applications.
The average rate for a 30-year fixed-rate mortgage, based on closings, was 3.08%, up from 2.98% the previous week.
Photo: Paul Kapischka