Rates Decrease Slightly, Mortgage Activity Way Down

Mortgage Weekly Update

On Thursday, October 6, 2022, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), stating that the 30-year fixed-rate mortgage (FRM) averaged 6.66 percent, down from last week when it averaged 6.70 percent. The 15-year fixed-rate mortgage averaged 5.90 percent, down from last week when it averaged 5.96 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.36 percent, up from last week when it averaged 5.30 percent.

“Mortgage rates decreased slightly this week due to ongoing economic uncertainty,” said Sam Khater, Freddie Mac’s Chief Economist. “However, rates remain quite high compared to just one year ago, meaning housing continues to be more expensive for potential homebuyers.”

According to the Mortgage Bankers Association (MBA), mortgage applications decreased 14.2 percent from one week earlier. The Refinance Index decreased 18 percent from the previous week and was 86 percent lower than the same week one year ago. The Purchase Index decreased 13 percent from the previous week and was 37 percent lower than the same week one year ago.

“Mortgage rates continued to climb last week, causing another pullback in overall application activity, which dropped to its slowest pace since 1997. The 30-year fixed-rate hit 6.75 percent last week – the highest rate since 2006,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The current rate has more than doubled over the past year and has increased 130 basis points in the past seven weeks alone. The steep increase in rates continued to halt refinance activity and is also impacting purchase applications, which have fallen 37 percent behind last year’s pace. Additionally, the spreads between the conforming rate compared to Jumbo loans widened again, and we saw the ARM share rise further to almost 12 percent of applications.”

More housing news

Total commercial and multifamily lending is expected to fall 14 percent this year, due to a slowdown in the second half of 2022 driven by rising rates and economic ambiguity. MBA anticipates that borrowing and lending in this area will rebound in 2023 and 2024. 

Mortgage applications in Florida fell 31 percent last week, due partly to Hurricane Ian.

In a continued effort to maintain transparency, Freddie Mac published its 2021 Sustainability Accounting Standards Board Report.

Additional mortgage activity

  • The refinance share of mortgage activity decreased to 29.0 percent of total applications from 30.2 percent the previous week. 
  • The adjustable-rate mortgage (ARM) share of activity increased to 11.8 percent of total applications.
  • The FHA share of total applications increased to 13.2 percent from 12.5 percent the week prior.
  • The VA share of total applications remained unchanged at 10.7 percent from the week prior.
  •  The USDA share of total applications remained unchanged at 0.6 percent from the week prior.

This week in mortgage rates

Economic uncertainty continues to impact rates and mortgage applications. Here’s how average rates broke down by loan type:

  • Conforming 30-year fixed-rate loans: 6.66% (down from 6.70%)
  • 15-year fixed-rate loans: 5.90% (down from 5.96%)
  • 5/1 adjustable-rate loans: 5.36% (up from 5.30%)

Check back next week for the most up-to-date mortgage and housing


September 29-Rates up for Sixth Consecutive Week, Applications Down

On Thursday, September 29, 2022, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), stating that the 30-year fixed-rate mortgage (FRM) averaged 6.70 percent, up from last week when it averaged 6.29 percent. The 15-year fixed-rate mortgage averaged 5.96 percent, up from last week when it averaged 5.44 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.30 percent, up from last week when it averaged 4.97 percent.

“The uncertainty and volatility in financial markets is heavily impacting mortgage rates,” said Sam Khater, Freddie Mac’s Chief Economist. “Our survey indicates that the range of weekly rate quotes for the 30-year fixed-rate mortgage has more than doubled over the last year. This means that for the typical mortgage amount, a borrower who locked-in at the higher end of the range would pay several hundred dollars more than a borrower who locked-in at the lower end of the range.” 

Khater continued, “The large dispersion in rates means it has become even more important for homebuyers to shop around with different lenders.”

According to the Mortgage Bankers Association (MBA), mortgage applications decreased 3.7 percent from one week earlier. The Refinance Index decreased 11 percent from the previous week and was 84 percent lower than the same week one year ago. 

“Applications for both purchase and refinances declined last week as mortgage rates continued to increase to multi-year highs following more aggressive policy measures from the Federal Reserve to bring down inflation. Additionally, ongoing uncertainty about the impact of the Fed’s reduction of its MBS and Treasury holdings is adding to the volatility in mortgage rates. The 30-year fixed rate was 6.52 percent, its highest level since mid-2008. After a brief pause in July, mortgage rates have increased more than a percentage point over the past six weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. 

“With rates now more than double what they were a year ago, the pace of refinancing is running at a 22-year low and last week was more than 80 percent below last year’s level. Similarly, purchase activity was 29 percent lower than a year ago, with higher rates and economic uncertainty weighing on buyers’ decisions.”

More housing news

We saw homebuyer affordability improve for the third straight month in August. “The healthy labor market continues to be a positive for the housing market, despite ongoing economic uncertainty and high inflation,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. 

Although with rates jumping to 6% last week, September’s affordability improvement will likely look a bit different.  

For homeowners who may be affected by Hurricane Ian, Freddie Mac offers immediate relief options that can provide mortgage relief for up to 12 months without incurring late fees or penalties.

Additional mortgage activity

  • The refinance share of mortgage activity decreased to 30.2 percent of total applications from 32.5 percent the previous week. 
  • The adjustable-rate mortgage (ARM) share of activity increased to 10.4 percent of total applications.
  • The FHA share of total applications decreased to 12.5 percent from 13.3 percent the week prior. 
  • The VA share of total applications decreased to 10.7 percent from 10.9 percent the week prior.
  •  The USDA share of total applications remained unchanged at 0.6 percent from the week prior.

This week in mortgage rates

Mortgage rates rose for the sixth consecutive week. Here’s how average rates broke down by loan type:

  • Conforming 30-year fixed-rate loans: 6.70% (up from 6.29%)
  • 15-year fixed-rate loans: 5.96% (up from 5.44%)
  • 5/1 adjustable-rate loans: 5.30% (up from 4.97%)

Check back next week for the most up-to-date mortgage and housing news.


September 22- Mortgage Rates Inch Up Across the Board, Applications Increased but Remain Well Below Last Year’s Levels

On Thursday, September 22, 2022, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), stating that the 30-year fixed-rate mortgage (FRM) averaged 6.29 percent, up from last week when it averaged 6.02 percent. The 15-year fixed-rate mortgage averaged 5.44 percent, up from last week when it averaged 5.21 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.97 percent, up from last week when it averaged 4.93 percent.

“The housing market continues to face headwinds as mortgage rates increase again this week, following the 10-year Treasury yield’s jump to its highest level since 2011,” said Sam Khater, Freddie Mac’s Chief Economist. “Impacted by higher rates, house prices are softening, and home sales have decreased. However, the number of homes for sale remains well below normal levels.”

According to the Mortgage Bankers Association (MBA), mortgage applications increased 3.8 percent on a seasonally adjusted basis from one week earlier. The Refinance Index increased 10 percent from the previous week and was 83 percent lower than the same week one year ago. 

“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce — in their efforts to slow inflation — another sizable short-term rate hike. Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25 percent — the highest since October 2008,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels, with purchase applications 30 percent lower and refinance activity down 83 percent. The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”

More housing news

Mortgage applications for new home purchases decreased 10.1 percent compared with a year ago, according to the MBA Builder Application Survey (BAS) data for August 2022. But compared with July 2022, applications increased by 17 percent. 

“New home purchase applications were down year-over-year but rebounded in August after four consecutive months of declines, despite higher mortgage rates, declining homebuilder sentiment, and looming economic uncertainty,” Kan said. “The average loan size decreased for the fourth straight month, which is a sign of slowing home-price growth in the new homes market.”

The level of commercial/multifamily mortgage debt outstanding increased by $99.5 billion (2.3 percent) in the second quarter of 2022, according to the MBA. 

Additional mortgage activity

  • The refinance share of mortgage activity increased to 32.5 percent of total applications from 30.2 percent the previous week. 
  • The adjustable-rate mortgage (ARM) share of activity remained unchanged at 9.1 percent of total applications.
  • The FHA share of total applications decreased to 13.3 percent from 13.4 percent the week prior. 
  • The VA share of total applications decreased to 10.9 percent from 11.3 percent the week prior.
  •  The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

This week in mortgage rates

Mortgage rates continued to climb this week. Here’s how average rates broke down by loan type:

  • Conforming 30-year fixed-rate loans: 6.29% (up from 6.02%)
  • 15-year fixed-rate loans: 5.44% (up from 5.21%)
  • 5/1 adjustable-rate loans: 4.97% (up from 4.93%)

Check back next week for the most up-to-date mortgage and housing news.


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