Rising interest rates caused mortgage applications to fall 12.7% on a seasonally adjusted basis last week, according to a weekly survey by the Mortgage Bankers Association (MBA).
On an unadjusted basis, mortgage loan application volume declined 11% week over week.
Purchase applications decreased 7% last week, while refinances were down 20%. The refinance share of mortgage activity decreased to 37.3% of total applications from 41.3% the prior week — its lowest mark since January.
“Overall mortgage application activity declined last week, as rates increased to their highest level in two months. The 30-year fixed rate rose for the second straight week to 6.9%, an almost 30-basis-point increase over two weeks,” said Joel Kan, MBA’s vice president and deputy chief economist, in a press release. “These higher rates drove a 20% drop in refinance applications, especially for higher balance loans, with the average loan size falling substantially.”
The adjustable-rate mortgage share of loan activity declined to 7.5% of total applications last week from 9.6% for the week ending April 11.
The Federal Housing Administration share of mortgage applications increased to 16.7% from 15.8% the previous week. The U.S. Department of Veterans Affairs share decreased slightly to 13.4% from 13.7%, while the Department of Agriculture share of total applications inched lower to 0.4% from 0.5% the prior week.
“Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers,” Kan observed. “Both conventional and government purchase activity fell relative to the week before, but the overall level of purchase applications was still 6% higher than a year ago.”
