Application activity recedes as mortgage rates inch up

Mortgage demand was weaker last week as interest rates moved higher across the board.

Mortgage applications decreased by 2.3% on a seasonally adjusted basis during the week ending Feb. 9, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey.

“Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Refinance applications declined and remained depressed, with rates still higher than a year ago.”

Purchase applications decreased by 3% from one week earlier on a seasonally adjusted basis, while refinance applications fell by 2% in the same period. Last week, refis comprised 34.2% of all applications, down from 35.4% the previous week.

The 30-year fixed-rate mortgage averaged 6.64% as of Feb. 8, according to Freddie Mac’s Primary Mortgage Market Survey.

The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) increased to 6.87%, up from 6.80% the week before. Meanwhile, rates on jumbo loans (greater than $766,550) increased to 7%, up from 6.88%.

The Federal Housing Administration’s (FHA) share of total applications increased to 13.4% last week, down from 13.1% the week prior. The U.S. Department of Veterans Affairs (VA) share declined to 13.1%, down from 14.1% the week before. The U.S. Department of Agriculture (USDA) share remained unchanged at 0.4%.

The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.