Mortgage Rates Tumble, Boosting Applications Slightly

Mortgage Weekly Update

On Thursday, November 17, 2022, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortMogage (FRM) averaged 6.61 percent, down from last week when it averaged 7.08 percent. A year ago at this time, the 30-year FRM averaged 3.10 percent.

The 15-year fixed-rate mortgage averaged 5.98 percent, down from last week when it averaged 6.38 percent. A year ago at this time, the 15-year FRM averaged 2.39 percent.

“Mortgage rates tumbled this week due to incoming data that suggests inflation may have peaked,” said Sam Khater, Freddie Mac’s Chief Economist. “While the decline in mortgage rates is welcome news, there is still a long road ahead for the housing market. Inflation remains elevated, the Federal Reserve is likely to keep interest rates high and consumers will continue to feel the impact.”

“Over the last fifty years, Freddie Mac has closely monitored the trajectory of mortgage rates,” added Khater. “This week we are launching enhancements to our Primary Mortgage Market Survey methodology that will increase its accuracy and reliability. This new approach will incorporate more detailed data and monitor real-time mortgage rates more closely.”

According to the Mortgage Bankers Association (MBA), mortgage applications increased 2.7 percent from one week earlier. The Refinance Index decreased 2 percent from the previous week and was 88 percent lower than the same week one year ago. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 46 percent lower than the same week one year ago.

“Application activity, adjusted to account for the Veterans Day holiday, increased in response to the drop in rates — driven by a 4 percent rise in home purchase applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications increased for all loan types, and the average purchase loan dipped to its smallest amount since January 2021. Refinance activity remained depressed, down 88 percent over the year. There is very little refinance incentive with rates so much higher than last year.”  

More housing news

A new survey from Freddie Mac finds that Gen Z adults (ages 18-25) still view homeownership positively, but they’re leery of the obstacles they may face. When the same survey was last fielded in 2019, 27% of Gen Z adults said homeownership was out of reach financially. In this latest survey, 34% find owning a home out of reach.

Mortgage applications for new home purchases decreased 28.6 percent in October compared with a year ago, according to MBA Builder Application Survey (BAS).

“New home purchase activity weakened on a monthly and annualized basis in October, as the sharp jump in mortgage rates to nearly 7 percent reduced both overall demand and the purchasing power for many prospective buyers,” said MBA’s Kan.

The Federal Housing Administration’s (FHA) annual report to Congress reflected a very healthy FHA program with lower delinquency levels. According to MBA’s President and CEO Bob Broeksmit, CMB, “Thanks to prudent risk management over the past several years by HUD and FHA lenders, the Fund’s capital reserve ratio is more than five times the statutory minimum reserve ratio and is well positioned to withstand an economic slowdown.”

According to the Mortgage Credit Availability Index (MCAI), mortgage credit availability fell by 0.5 percent to 102 in October, indicating that lending standards are tightening.

Additional mortgage activity

  • The refinance share of mortgage activity decreased to 27.6 percent of total applications from 28.1 percent the previous week.
  • The adjustable-rate mortgage (ARM) share of activity decreased to 10.6 percent of total applications from 12 percent the previous week.
  • The FHA share of total applications increased to 13.5 percent from 13.3 percent the week prior.
  • The VA share of total applications increased to 10.6 percent from 10.3 percent the week prior.
  • The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.

This week in mortgage rates

Rates fall on fixed-rate loans. Here’s how average rates broke down:

  • 30-year fixed-rate loans: 6.61% (down from 7.08%)
  • 15-year fixed-rate loans: 5.98% (down from 6.38%)

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


Nov 10 – Rates Rise Above Seven Percent, Mortgage Applications Down

On Thursday, November 10, 2022, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), stating that the 30-year fixed-rate mortgage (FRM) averaged 7.08 percent, up from last week when it averaged 6.95 percent. The 15-year fixed-rate mortgage averaged 6.38 percent, up from last week when it averaged 6.29 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.06 percent, up from last week when it averaged 5.95 percent.

“As the housing market adjusts to rapidly tightening monetary policy, mortgage rates again surpassed seven percent,” said Sam Khater, Freddie Mac’s Chief Economist. “The housing market is the most interest-rate sensitive segment of the economy, and the impact rates have on homebuyers continues to evolve. Home sales have declined significantly and, as we approach year-end, they are not expected to improve.”

According to the Mortgage Bankers Association (MBA), mortgage applications decreased 0.1 percent from one week earlier. The Refinance Index decreased 4 percent from the previous week and was 87 percent lower than the same week one year ago. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 41 percent lower than the same week one year ago.

“Purchase applications increased for the first time after six weeks of declines but remained close to 2015 lows, as homebuyers remained sidelined by higher rates and ongoing economic uncertainty. Refinances continued to fall, with the index hitting its lowest level since August 2000,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

More housing news

Commercial and multifamily mortgage originations decreased 13 percent in the third quarter of 2022. Rising interest and capitalization rates began to affect deal volume during the third quarter, according to Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. A decline in originations for office, multifamily, and retail led to the overall decrease.

Additional mortgage activity

  • The refinance share of mortgage activity decreased to 28.1 percent of total applications from 28.6 percent the previous week.
  • The adjustable-rate mortgage (ARM) share of activity increased to 12 percent of total applications from 11.8 percent the previous week.
  • The FHA share of total applications decreased to 13.3 percent from 13.5 percent the week prior.
  • The VA share of total applications remained unchanged at 10.3 percent from the week prior.
  • The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

This week in mortgage rates

Rates are up on all loan types. Here’s how average rates broke down by loan type:

  • Conforming 30-year fixed-rate loans: 7.08% (up from 6.95%)
  • 15-year fixed-rate loans: 6.38% (up from 6.29%)
  • 5/1 adjustable-rate loans: 6.06% (up from 5.95%)

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


Nov 3 – Dip Under Seven Percent, Buyer Demand Remains Low

On Thursday, November 3, 2022, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), stating that the 30-year fixed-rate mortgage (FRM) averaged 6.95 percent, down from last week when it averaged 7.08 percent. The 15-year fixed-rate mortgage averaged 6.29 percent, down from last week when it averaged 6.36 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.95 percent, down from last week when it averaged 5.96 percent.

“Mortgage rates continue to hover around seven percent, as the dynamics of a once-hot housing market have faded considerably,” said Sam Khater, Freddie Mac’s Chief Economist. “Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint. Yesterday’s interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market.”

According to the Mortgage Bankers Association (MBA), mortgage applications decreased 0.5 percent from one week earlier. The Refinance Index increased 0.2 percent from the previous week and was 85 percent lower than the same week one year ago. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 41 percent lower than the same week one year ago.

“Mortgage applications declined for the sixth consecutive week despite a slight drop in rates. The 30-year fixed rate decreased for the first time in over two months to 7.06 percent, but remained close to its highest since 2002,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Apart from the ARM loan rate, rates for all other loan types were more than three percentage points higher than they were a year ago. These elevated rates continue to put pressure on both purchase and refinance activity and have added to the ongoing affordability challenges impacting the broader housing market, as seen in the deteriorating trends in housing starts and home sales.”

More housing news

Refinance applications continued to run more than 80 percent below last year’s pace. The share of refinance applications was below 30 percent for the fifth straight week.

A surge in mortgage rates caused homebuyer affordability to drop in September. The national median payment applied for by applicants increased 5.5 percent to $1,941 from $1,839 in August, according to the MBA’s Purchase Applications Payment Index (PAPI).

“Homebuyer affordability took an enormous hit in September, with the 75-basis-point jump in mortgage rates leading to the typical homebuyer’s monthly payment rising $102 from August,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. “With mortgage rates continuing to rise, the purchasing power of borrowers is shrinking. The median loan amount in September was $305,550 — much lower than the February peak of $340,000.”  

Additional mortgage activity

This week’s results include revised data to reflect an update to last week’s survey results.

  • The refinance share of mortgage activity increased to 28.6 percent of total applications from 28.2 percent the previous week.
  • The adjustable-rate mortgage (ARM) share of activity decreased to 11.8 percent of total applications.
  • The FHA share of total applications decreased to 13.5 percent from 13.9 percent the week prior.
  • The VA share of total applications decreased to 10.3 percent from 10.7 percent the week prior.
  • The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

This week in mortgage rates

Rates fell slightly. Here’s how average rates broke down by loan type:

  • Conforming 30-year fixed-rate loans: 6.95% (down from 7.08%)
  • 15-year fixed-rate loans: 6.29% (down from 6.36%)
  • 5/1 adjustable-rate loans: 5.95% (down from 5.96%)

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

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