Mortgage application volume took a big hit last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, plummeted 13.3 percent on a seasonally adjusted basis compared to the prior week and was down 4.0 percent before adjustment. Nearly all of the damage was on purchase side. That index decreased 18 percent on a seasonally adjusted basis and 4 percent unadjusted. The Index was 41 percent lower than the same week in 2022. [purchaseappschart] Refinance activity posted a more modest decline, down 2 percent from the previous week. The volume was 72 percent lower than a year earlier. Refinancing applications had a 32.5 percent share of the total, up a half-point from a week earlier. [refiappschart] “Mortgage rates increased across all loan types last week, with the 30-year fixed rate jumping 23 basis points to 6.62 percent – the highest rate since November 2022. The jump led to the purchase applications index decreasing 18 percent to its lowest level since 1995,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This time of the year is typically when purchase activity ramps up, but over the past two weeks, rates have increased significantly as financial markets digest data on inflation cooling at a slower pace than expected. The increase in mortgages rates has put many homebuyers back on the sidelines once again, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates.”
