According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Dec. 30, 2022, applications decreased by 13.2 percent from two weeks prior.
“The end of the year is typically a slower time for the housing market, and with mortgage rates still well above 6 percent and the threat of a recession looming, mortgage applications continued to decline over the past two weeks to the lowest level since 1996,” MBA’s Vice President and Deputy Chief Economist Joel Kan said. “Purchase applications have been impacted by slowing home sales in both the new and existing segments of the market. Even as home-price growth slows in many parts of the country, elevated mortgage rates continue to put a strain on affordability and are keeping prospective homebuyers out of the market.”
Per the MBA, the survey, which has been conducted since 1990, entails more than 75 percent of all domestic retail residential mortgage applications – with mortgage bankers, commercial banks, and thrifts included among respondents.
According to the survey findings, the Market Composite Index, described by officials as a measure of mortgage loan application volume, decreased 13.2 percent on a seasonally adjusted basis while the seasonally adjusted Purchase Index decreased 12.2 percent from two weeks earlier.
Additionally, the unadjusted Purchase Index decreased by 38.5 percent, according to the survey, compared with two weeks ago and was 42 percent lower than the same week one year ago.
“Refinance applications remain less than a third of the market and were 87 percent lower than a year ago as rates remained close to double what they were in 2021,” Kan said. “Mortgage rates are lower than October 2022 highs but would have to decline substantially to generate additional refinance activity.”