Mortgage Lenders And Brokers Are Feeling The Pain As Mortgage Applications Plunge To A 28-Year Low
Mortgage applications plunge to 1995 levels. The Mortgage Bankers Association says that lenders and brokers have witnessed a significant decline of 6.9% from the previous week. This is worst week for originations since 1995.
The MBA’s Market Composite Index has dropped 6.9% from a seasonally adjusted basis just a week before. A closer inspection also reveals a 7% decrease on an unadjusted basis. Refinance loans took a massive hit. They decreased 10% from the previous week. This marks a 12% dip from the same week in 2022.
However, the most startling is the downward trajectory of the Purchase Index. The Purchase Index decreased 6% from one week earlier. When unadjusted, the Purchase Index shows a 5% decline from the previous week. This is a staggering 21% lower than the same week a year ago.
MBA’s Deputy Chief Economist Joel Kan told the media:
Further dissection of the data also reveals:
- Refinance share of mortgage activity has decreased to 30.5% of total applications from 31.6% the previous week.
- The ARM share of activity rose to 9.3% of total applications.
- The FHA share of total applications surged to 14.8% from 14.4% the preceding week.
- The VA share also rose, moving to 10.7% from 10.2% the previous week.
- USDA share remains steady at 0.5%.
On the interest rate front:
- The average interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 7.70%.Jumbo loan balances witnessed a decrease in interest rates, moving to 7.56%.
- 30-year fixed-rate mortgages backed by the FHA saw a slight dip in interest rates, settling at 7.36%.
- 15-year fixed-rate mortgages saw a minuscule increase, landing at 6.98%.
- 5/1 ARMs experienced an uptick, with interest rates moving to 6.52%.
This Article Originally Appeared On MFI-Miami.
Read more stories about the slowly imploding mortgage industry on LenderMeltdown.com.
