Mortgage applications fell 8.3% on a seasonally adjusted basis during the week ended April 22, as mortgage rates hit their highest level since 2009, the Mortgage Bankers Association said, citing its Market Composite Index.
The average contract interest rate for conforming 30-year mortgages of $647,200 or less jumped to 5.37% from 5.2%, while the rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 5.29% from 5.11%.
“Overall application activity fell to the lowest level since 2018, with both purchase and refinance applications posting declines,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release. “Prospective homebuyers have pulled back this spring, as they continue to face limited options of homes for sale along with higher costs from increasing mortgage rates and prices. The recent decrease in purchase applications is an indication of potential weakness in home sales in the coming months.”
The refinance index, meanwhile, fell 9% from the previous week and was down 71% from the same week a year ago. The refinance share of mortgage activity decreased to 35% of total applications from 35.7% the previous week.
“In a period of high home-price growth and rapidly increasing mortgage rates, borrowers continued to mitigate higher monthly payments by applying for ARM loans,” Kan said.
The adjustable-rate mortgage share of activity increased to 9.3% of total applications. The FHA share of total applications rose to 10.6% from 9.9%, while the VA share of total applications rose to 10.2% from 10.1%. The USDA share of total applications was flat at 0.5%.
The seasonally adjusted purchase index fell 8% from the previous week, while the unadjusted purchase index gained 7% and was 17% lower than one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $647,200 rose to 4.89% from 4.76%, and the average contract interest rate for a 15-year fixed-rate mortgage increased to 4.68% from 4.44%.