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Economy in Brief

U.S. Mortgage Applications Decline as Interest Rates Increase
by Tom Moeller  March 23, 2022

• Purchase applications fall modestly.

• Applications for refinancing are down sharply.

• Mortgage interest rates surge.

The Mortgage Bankers Association's Loan Applications Index fell 8.1% (-38.9% y/y) in the week ending March 18 after the previous week's 1.2% weakening. Applications to refinance an existing loan fell 14.4% (-54.2% y/y) after a 2.8% decline in the previous week. Applications to purchase a home eased 1.5% (-12.1% y/y) following a 0.7% gain.

The share of applications for refinancing fell to 44.8% last week from 48.4% the previous week. The adjustable-rate mortgage (ARM) share of activity in the latest week rose to 6.4% from 5.6% the week before.

Mortgage interest rates in the week of March 18 rose to 4.68% for 30-year fixed-rate loans from 4.42% in the previous week. It was the highest rate since March 2019, up from a 2.95% low in December 2020. The effective rate on a 15-year mortgage rose to 3.89% last week from 3.66% in the week prior. The rate on a Jumbo 30-year mortgage rose to 4.26% from 4.13%. The rate on a 5-year adjustable-rate mortgage increased to 3.59% from 3.44%.

Applications for fixed-rate loans declined 9.0% (-41.0% y/y) in the week ended March 18 following their 1.5% fall in the prior week. Applications for adjustable-rate mortgages increased 5.9% (23.8% y/y) after rising 4.9% in the previous week.

The average size of a mortgage loan rose 3.0% (16.4% y/y) last week to $387,500. The average size of a loan for purchase rose 1.5% (12.4% y/y) to $460,100. The average size of a refinanced loan gained 1.4% (4.9% y/y) to $298,200.

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) 03/18/22 03/11/22 03/04/22 Y/Y 2021 2020 2019
Total Market Index -8.1 -1.2 8.5 -38.9 -8.0 63.0 32.4
  Purchase -1.5 0.7 8.6 -12.1 -2.3 11.4 6.6
  Refinancing -14.4 -2.8 8.5 -54.2 -10.7 111.0 71.1
30-Year Effective Mortgage Interest Rate (%) 4.68 4.42 4.22 3.43

(Mar. '21)

3.25 3.40 4.34
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