Mortgage Applications Fell Because Of Affordability Issues

The 30-year fixed rate increased to 6.85%. This is the highest rate since the end of May. As a result, purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes.”

Mortgage rates are still more than a percentage point higher than a year ago. Thus, making housing affordability a challenge in many parts of the country. 

The average loan size for a purchase application declined to $423,500. This is the lowest level since January 2023. The industry saw more activity in some of the lower-price tiers. This was due to buyers searching for more affordable options.

The refinance share of mortgage activity inched up to 27.4%. This is an increase from 27.2% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.2% of total applications.

The FHA share of total applications ticked up to 13% from 12.9% a week earlier. The VA share of total applications decreased to 11.7% from 12.2% a week earlier. The USDA share of total applications remained unchanged at 0.4%.

Mortgage Rates

Note: The points listed include the origination fee and are for 80% loan-to-value (LTV) ratio loans.

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.85% from 6.75%, with points increasing to 0.65 from 0.64. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.95% from 6.91%, with points decreasing to 0.64 from 0.69. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.68% from 6.63%, with points decreasing to 0.98 from 1.08. The effective rate increased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages increased to 6.3% from 6.23%, with points increasing to 0.91 from 0.69. The effective rate increased from last week.
• The average contract interest rate for 5/1 ARMs decreased to 6% from 6.28%, with points increasing to 1.23 from 1.02. The effective rate decreased from last week.

The MBA’s survey covers over 75% of all U.S. retail residential mortgage applications. The MBA has conducted these weekly surveys since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.