Total mortgage demand was only down 1.3% for the week thanks to a slight uptick in purchases, according to the Mortgage Bankers Association’s weekly survey…(MBA)
- PURCHASES: The Purchase Index was up 1.0% from last week and is now only down 6.0% from the same time last year.
- REFIS: The Refinance Index continues to drop with a 5% decrease week-over-week which puts refi demand down 62% year-over-year.
NOTE: The refinance share of mortgage activity decreased to just 37.1% of total applications from 38.8% the previous week.
Mortgage rates continued their climb with the 30-year fixed jumping above 5.0% for the first time since November 2018…
- 30-YR FIXED: The average contract interest rate was up 23 basis points to 5.13%, this is an amazing 186 basis points higher than one year ago. Wow.
- 15-YR FIXED: The average contract interest rate was also up 23 basis points to 4.34%, this is 167 basis points higher than one year ago.
The quick pace of rising rates has caused the Mortgage Bankers Association to downgrade its 2022 prediction for mortgage originations. The April 2022 forecast calls for mortgage originations to total $2.58 trillion in 2022, a 35.5%decline from 2021.
- Purchase originations are still forecasted to reach a record $1.72 trillion this year, a 4.0% increase from 2021 but 3.0% lower than the March prediction.
- Refinance originations are now expected to fall 64% to $841 billion, a 2.3% decrease from March’s projection.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, noted that purchases continue to hold strong despite affordability issues…
- “Higher rates are increasing borrower interest in ARMs. Their share of applications last week was at 7.4 percent, which was the highest share since June 2019. In a promising sign of strong purchase demand amidst affordability challenges, both conventional and government purchase applications increased.”