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Economy in Brief

U.S. Mortgage Application Volume Steadies After Sizable Decrease
by Carol Stone, CBE  March 2, 2022

• Total applications down 25% in latest four weeks.

• Applications for purchase down, refinancing application edge upward.

• Mortgage interest rates increase slightly.

The Mortgage Bankers Association's Loan Applications Index was little changed in the week ending February 25; it declined 0.7% (-41.7% y/y) from the prior week when it had fallen 13.1%. The index is down 25.0% over the last four week. Applications to purchase a home were down 1.8% in the latest week (-8.7% y/y) after falling 10.1% in the prior week. Refinancing applications actually increased modestly by 0.5% last week (-56.2% y/y) after declining 15.6% in the previous week.

The share of applications for refinancing fell to 49.9% in the week ended February 25 from 50.1% in the previous week. That share is down significantly from 73.1% averaged in December 2020. The adjustable-rate mortgage (ARM) share of activity increased to 5.3% from 5.1% in the prior week.

Mortgage interest rates rose modestly again last week. The effective rate on a 30-year mortgage was up 8 basis points to 4.28% from 4.20% the week ended February 18. It was the highest level since 4.33% in the week ended May 31, 2019. The effective rate on a 15-year mortgage increased to 3.59% from 3.53% in the previous week. The rate on a Jumbo 30-year mortgage rose to 3.99% from 3.97%. The interest rate on a 5-year adjustable-rate mortgage rose to 3.57% from 3.39.

Applications for fixed-rate loans decreased 0.9% in the February 25 week (-43.2% y/y) after falling 13.3% the week before. Applications for adjustable-rate mortgages increased 3.5% (+7.7% y/y) in the latest week after weakening 10.6% in the previous week.

The average size of a mortgage loan increased 0.7% in the February 25 week (+11.5% y/y) after easing 0.1% (+8.0% y/y) to $374,800 in the week ended February 18. The average size of a loan for purchase rose 0.9% (+10.2% y/y) to $454,400 in the February 25 week. The average size of a refinanced loan edged upward 0.1% (-1.6% y/y) to $294,900.

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) 02/25/22 02/18/22 02/11/22 Y/Y 2021 2020 2019
Total Market Index -0.7 -13.1 -5.4 -41.7 -8.0 63.0 32.4
  Purchase -1.8 -10.1 -1.2 -8.7 -2.3 11.4 6.6
  Refinancing 0.5 -15.6 -8.9 -56.2 -10.7 111.0 71.1
30-Year Effective Mortgage Interest Rate (%) 4.28 4.20 4.18 3.19

(Feb. '21)

3.25 3.40 4.34
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