Understanding the August 23, 2023 Mortgage Bankers Association (MBA) Weekly Survey
As real estate agents, it is crucial to stay informed about the latest trends and insights in the mortgage industry. The Mortgage Bankers Association (MBA) is a trusted source of information for professionals in the field. In their most recent Weekly Mortgage Applications Survey for the week ending August 18, 2023, the MBA provided valuable data on the current state of mortgage applications. Let’s delve into the key findings and implications from this survey.
Decrease in Mortgage Applications
According to the MBA’s survey, mortgage applications decreased by 4.2 percent from the previous week. This decline reflects a challenging market environment, driven by factors such as increased Treasury yields and concerns about inflation. The Market Composite Index, which measures mortgage loan application volume, also saw a 4.2 percent decrease on a seasonally adjusted basis.
Impact on Refinancing and Purchase Activity
The Refinance Index experienced a 3 percent decrease compared to the previous week and was 35 percent lower than the same period last year. This decline can be attributed to the spike in mortgage rates. Additionally, the seasonally adjusted Purchase Index decreased by 5 percent from the previous week, indicating a slowdown in homebuying activity.
Rising Mortgage Rates
Joel Kan, MBA’s Vice President and Deputy Chief Economist, highlighted the impact of rising mortgage rates in the current market. The average contract rate on a 30-year fixed-rate mortgage climbed to 7.31 percent – the highest level since December 2000. This increase in rates has led to a significant drop in applications for home purchase mortgages.
Challenges in the Housing Market
Low housing supply continues to be a significant factor affecting the real estate market. With limited inventory, home prices remain high in many areas, further hindering affordability for potential buyers. These challenges have contributed to the decline in both purchase applications and homebuyer demand.
Adjustable-Rate Mortgages (ARM)
Interestingly, the survey indicated an increase in the popularity of adjustable-rate mortgages. The ARM share of applications rose to 7.6 percent, the highest level in five months. This suggests that some homebuyers are willing to accept interest rate risk to lower their monthly payments after the initial fixed period.
Real estate agents should take note of the following key takeaways from the MBA’s Weekly Applications Survey:
- Mortgage applications decreased by 4.2 percent from the previous week.
- Refinance activity declined by 3 percent, while purchase activity dropped by 5 percent.
- Mortgage rates reached the highest level since December 2000, impacting homebuyer demand.
- Low housing supply continues to drive up home prices, posing affordability challenges.
- Adjustable-rate mortgages witnessed increased popularity among homebuyers.
The August 23, 2023 Mortgage Bankers Association (MBA) Weekly Survey sheds light on the current state of the mortgage market. As real estate agents, it is crucial to stay informed about these trends to better assist clients in navigating the evolving landscape. By understanding the challenges and opportunities presented by the survey’s findings, agents can provide valuable guidance to buyers and sellers alike.
For more details on the survey and to access additional research from MBA, please visit the MBA’s website.
Note: The content of this blog post is based on information from the August 23, 2023 Mortgage Bankers Association (MBA) Weekly Survey. The MBA is a reliable source of information for the mortgage industry.