Mortgage applications fall more than eight percent in February: Massachusetts Homebuyers Homeownership

 Mortgage applications plunged 8.1 percent on a seasonally adjusted basis during the week ended Feb. 4,2022 the Mortgage Bankers Association said, citing its Market Composite Index. The average contract interest rate for thirty year fixed rate mortgages backed by the Federal Housing Administration increased to 3.93 percent from 3.86 percent, and the average contract interest rate for a fifteen year fixed rate mortgage rose to 3.16 percent from 3.01 percent. The average contract interest rate for thirty year fixed rate mortgages with jumbo loan balances of more than $647,200 increased to 3.62 percent from 3.59 percent.

 On an unadjusted basis, the market composite index, which measures mortgage loan application volume, declined six percent. The refinance index, meanwhile, slid seven percent from the previous week and was down fifty two percent from the same week a year ago. The refinance share of mortgage activity decreased to 56.2 percent of total applications from 57.3 percent the previous week. The seasonally adjusted purchase index fell ten percent from the previous week, while the unadjusted purchase index dipped three percent and was twelve percent lower than one year ago.

 “Mortgage rates continued to edge higher last week, with the thirty year fixed rate climbing to 3.83 percent,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release. “Rates followed the U.S. ten year yield and other sovereign bonds as the Federal Reserve and other key global central banks responded to growing inflationary pressures and signaled that they will start to remove accommodative policies. With rates 87 basis points higher than the same week a year ago, refinance applications continued to decrease.”

 The adjustable rate mortgage share of activity was flat at 4.5 percent of total applications. The FHA share of total applications increased to eight percent from 7.7 percent in the preceding week, while the VA share of applications rose to ten percent from 9.1 percent. The USDA share of applications was flat at 0.4 percent. “Purchase activity slowed after the previous week’s gain,” Kan added. “Both conventional and FHA purchase applications saw proportional declines, resulting in purchase activity overall dropping ten percent. The average loan size again hit another record high at $446,000. Activity continues to be dominated by larger loan balances, as inventory remains tight for entry level buyers.”

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