Home purchase activity nears pandemic levels
The survey found stabilizing mortgage rates and increases in for-sale inventory
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey found mortgage applications fell 1.8% for the week ending July 22, 2022, from the previous week.
The decrease was the fourth week in a row as home purchase activity nears pandemic levels.
"Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000," said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
The survey comes as inflation woes and market uncertainty have sparked worry in potential buyers, causing them to avoid entering the market, Kan said.
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"Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic," he added. "Weakening purchase applications trends in recent months have been consistent with data showing a slowdown in sales for newly constructed homes and existing homes."
Among the turmoil, Kan said the data showed a stabilization in mortgage rates. He also expressed optimism for the coming months.
"A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year," Kan said.
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He added: "With mortgage rates remaining well over 5%, refinance applications are now 83% below last year’s pace."
The survey found a decrease in the refinance share of mortgage activity, from 31.4% to 30.7%, and a decrease in the FHA share from 12.4% to 12.1%. The VA share of total applications and the USDA share of total applications remained unchanged from the previous week.
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The MBA survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents to the survey include mortgage bankers, commercial banks and thrifts.