Refinance applications continued their downward trend, posting a 5% week-over-week decline. Compared to a year ago, refi activity was down by 62%. Purchase applications were up by 1% on a seasonally adjusted basis and 2% on an unadjusted basis.
MBA chief economist Mike Fratantoni added that the jump in mortgage rates will slow the housing market and further reduce refinance demand for the rest of this year. As a result, MBA’s April 2022 forecast now calls for mortgage originations to total $2.58 trillion this year – a 35.5% decline from $4 trillion a year ago.
Read more: Housing market cooling down
“Mortgage rates have spiked more than 1.5 percentage points thus far in 2022. This rapid increase in rates, caused by a much more rapid pace of rate hikes and balance sheet reduction from the Federal Reserve, is in response to the booming job market and inflation being at a 40-year high,” Fratantoni said. “Higher home prices and rates, as well as ongoing supply constraints, are now expected to lead to an annual decline in existing home sales.”
However, the MBA still anticipates purchase originations reaching a record $1.72 trillion in 2022, up 4% from 2021. Meanwhile, refi originations are forecast to fall 64% to $841 billion.
Comments are closed, but trackbacks and pingbacks are open.