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Mortgage Applications Drop as Interest Rates Continue to Soar

Mortgage application volume decreased 9.4% from one week earlier as key interest rates hit their highest level since July 2015, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 25 found that the refinance index decreased 16% from the previous week. This week's results included an adjustment for the Thanksgiving holiday.

The seasonally adjusted purchase index decreased 0.2% from one week earlier, while the unadjusted purchase index decreased 34% compared with the previous week and was 3% higher than the same week one year ago.

The market share of refi applications decreased to 55.1% from 58.2% the previous week.

The adjustable-rate mortgage share of activity increased to 5.7% of total applications, while the FHA share of total applications decreased to 10.4% from 11.7%.

The VA share decreased to 11.7% from 12.5% and the USDA share remained unchanged at 0.8%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased 7 basis points to 4.23%, its highest level since July 2015. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000), the average contract rate also increased to its highest level since July 2015, 4.18%, from 4.04%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since July 2015, 4%, from 3.9%, while for 15-year fixed-rate mortgages backed by the FHA, the average increased to its highest level since October 2014, 3.48%, from 3.35%.

The average contract interest rate for 5/1 ARMs decreased 1 basis point to 3.23%.

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