Mike Fratantoni, senior vice president and chief economist at the MBA, said the association had forecast mortgage rates to trend higher through the course of 2022.
“Rates on 30-year conforming mortgages jumped by 23 basis points last week, the largest weekly increase since March 2020. The jump in rates comes as markets moved to price in a much faster pace of rate hikes, as well as expectations of fewer MBS purchases from the Federal Reserve,” Fratantoni said. “With mortgage rates now at 4.5%, compared to rates at or below 3% not that long ago, it is no surprise that refinance volume has dropped by more than 50% compared to this time last year.”
Likewise, both refinance and purchase applications were also 14% and 1% lower than the previous week, respectively. Both percentages are significantly lower compared to the same time last year.
The refinance share of mortgage activity also decreased to 44.8% from 48.4% the previous week. Meanwhile, the adjustable-rate mortgage share increased to 6.4% of total applications.