Mortgage applications hit 22-year low, lending activity suffers

The refinance index fell 5%, and the purchase index inched down by 1% from the previous week. Compared to a year ago, refinance and purchase applications were down by 82% and 18%, respectively.

“However, if home price growth slows more significantly and mortgage rates move lower, we might see some purchase activity return later in the year,” Kan added. “The 30-year fixed rate stayed more than two percentage points higher than a year ago at 5.45% but was down over 50 basis points from the June 2020 high of 5.98%, providing some relief for buyers in the market. The refinance index, however, fell 5% to its lowest level since November 2000, driven by a 6% drop in conventional refinance applications.”

Of total applications, the refinance share of mortgage activity decreased from 32% to 31.2% week over week. The adjustable-rate mortgage (ARM) share of activity dropped to 7% of total applications.

Subsequently, mortgage originators continue to experience strong headwinds.