A sale sign is seen outside a home on the market in Arlington, Virginia on July 23, 2009. The Mortgage Bankers Association said Wednesday that applications dropped to their lowest point in more than 20 years. File Photo/Alexis C. Glenn/UPI | License Photo
Aug. 17 (UPI) -- Mortgage applications dipped to their lowest point in more than 20 years as the volume of petitions dropped another seasonally adjusted 2.3% over the previous week, according to the latest figures from the Mortgage Bankers Association.
The association's weekly mortgage application survey pointed out that its refinance index decreased 5% last week from a week earlier and is down 82% from the same time last year. The purchase index fell 2% last week and is 18% lower from 2021.
"Mortgage application activity was lower last week, with overall applications declining over 2% to their lowest level since 2000," Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement.
"Home purchase applications continued to be held down by rapidly drying up demand, as high mortgage rates, challenging affordability, and a gloomier outlook of the economy kept buyers on the sidelines."
The decline in mortgage applications happened in the same week that there was a small dip in the average interest rate. The MBA report said the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $647,200 or less last week dipped to 5.45% from 5.47%.
"If home price growth slows more significantly and mortgage rates move lower, we might see some purchasing activity return later in the year," Kan said. "The refinance index, however, fell 5% to its lowest level since November 2000, driven by a six percent drop in conventional refinance applications."
Adjustable-rate mortgages, which have been favored at different by home borrowers at different points during 2022, saw their share activity decreased last week by 7% compared to other mortgage loan applications.