The latest weekly MBA survey shows mortgage applications down 13.2% over a two-week period, hurt by slowing home sales

The real estate market in the US continues to suffer and this is shown by the data from the Mortgage Bankers Association (MBA) Weekly Mortgage Application Survey for the week ending December 30, 2022, where it is reported that Mortgage applications decreased 13.2% from the previous two weeks.

“The end of the year is typically a slower time for the housing market, and with mortgage rates still well above 6% and the threat of a looming recession, mortgage applications have continued to decline over the past two years. weeks at the lowest level since 1996. said Joel Kan, MBA vice president and deputy chief economist.

According to the survey, purchase applications have been affected by the slowdown in home sales in both the new and existing segments of the market, as despite slowing home price growth in many parts of the country, high mortgage rates continue to put pressure on affordability and keep potential homebuyers out of the market.

“Refinancing applications are still less than a third of the market and were 87% lower than a year ago as rates stayed close to double what they were in 2021. Mortgage rates are lower than the highs October 2022, but they would have to decrease substantially. to generate additional refinancing activity,” Kan explained.

The MBA report notes that the refinancing share of mortgage activity increased to 30.3% of total applications from 28.8% the week before, while the share of adjustable-rate mortgage (ARM) activity acronym in English) decreased to 7.3% of the total requests.

In terms of mortgage rates, the 30-year fixed with conforming loan balances ($647,200 or less) increased to 6.58% from 6.42%, with points increasing to 0.73 from 0.65 (including origination fee) for 80%. from loan to Loan Value Ratio (LTV).

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) remained at 6.12%, with points increasing to 0.45 from 0.37 (including origination fee) for LTV loans of the 80%

The average contract interest rate for FHA-backed 30-year fixed-rate mortgages increased to 6.45% from 6.41%, with points increasing to 1.24 from 1.13 (including origination fee) for 80% LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.06% from 5.97%, with points increasing to 0.70 from 0.57 for 80% LTV loans.

Lastly, the average contract interest rate for the 5/1 ARM increased to 5.61% from 5.45%, with points decreasing to 0.62 from 0.95 for 80% LTV loans.

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