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Economy in Brief

U.S. Mortgage Applications Declined in Late-December
by Kathleen Stephansen, CBE  January 5, 2022

• Both purchase and refinancing applications dropped.

• 30-year rate edged up.

• Purchase loan size declined.

The Mortgage Bankers Association's Loan Applications Index declined 5.6% (-30.8% y/y) in the week ended December 31, following a 3.2% (-25.4% y/y) rise in the week ended December 24. Applications for loans to purchase a house dropped 10.2% (-11.6% y/y) after a 7.4% (-3.2% y/y) rise in the prior week. Applications for loans to refinance lost 2.5% (-40.0% y/y) following a 0.4% (-36.6% y/y) rise in the week ended December 24.

The share of applications for refinancing rose to 65.4% in the week ended December 31, following a 63.9% share in the week ended December 24. The adjustable-rate mortgage (ARM) share of activity stood at 3.3% in the week ended December 31 and at 3.6% in the prior week.

The effective interest rate on a 30-year mortgage rose to 3.47% in the week ended December 31 from 3.42% the week prior. The effective rate on a 15-year rate mortgage edged up slightly to 2.68% in the week ended December 31 from 2.67% in the prior week. The effective rate for a 30-year Jumbo mortgage loan eased to 3.42% last week relative the 3.45% in the week ended December 24, while the rate on a 5-year adjustable-rate loan declined to 2.57% from 2.82% the week prior. The last two series date back only to January 2011, while the others begin in January 1990

Applications for fixed-rate loans slipped 5.4% (-31.9% y/y) last week, after a 3.0% (-26.6% y/y) rise in the prior week. Applications for adjustable-rate mortgages dropped 13.7% (+32.9% y/y) in the week ended December 31, following an 8.3% (+31.6% y/y) rise in the previous week.

The average size of a mortgage loans was $331,600 in the week ending December 31 compared to $350,000 in the week ended December 24. The average size of loans for purchase was $401,600 in the latest week versus $415,400 one week earlier. The average size of refinanced loans declined to $294,600 from $313,000 in the prior week.

This survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database

MBA Mortgage Applications (%, SA) 12/31/21 12/24/21 12/17/21 Y/Y 2020 2019 2018
Total Market Index -5.6 3.2 -0.6 -30.8 -8.0 63.0 32.4
  Purchase -10.2 7.4 -3.3 -11.6 -2.3 11.4 6.6
  Refinancing -2.5 0.4 2.2 -40.0 -10.7 111.0 71.1
30-Year Effective Mortgage Interest Rate (%) 3.47 3.42 3.39 2.97

(Dec. '20)

3.25 3.40 4.34
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