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Economy in Brief

U.S. Mortgage Applications Rose for Second Week
by Sandy Batten  May 11, 2022

• Total applications increased 2.0%.

• Loans to purchase a house rose 4.5% while refinance loans fell 2.0%.

• Mortgage interest rates resumed their uptrend.

The Mortgage Bankers Association's Loan Applications Index rose 2.0% w/w (-49.8% y/y) in the week ended May 6 on top of a 2.5% w/w increase in the previous week. Prior to these two weekly increases, applications had fallen for seven consecutive weeks. Applications for purchase rose 4.5% w/w (-7.7% y/y) in the latest week following a 4.1% weekly rise in the prior week., By contrast, applications for refinancing resumed their decline, falling 2.0% w/w (-72.2% y/y) in the week ended May 6 after having edged up 0.2% w/w in the previous week. This was the eight decline in the past nine weeks.

The share of applications for refinancing fell further to 32.4% in the week ended May 6 from 33.9% in the prior week. This is the lowest reading since December 2000. The adjustable-rate mortgage (ARM) share of activity rose markedly to 10.8% in the week ended May 6 from 9.3% in the previous week. This is highest reading since March 2008.

Mortgage interest rates resumed their uptrend. The effective rate on 30-year fixed-rate loans rose 19bps to 5.74%, the highest rate since June 2009. The effective rate on 15-year fixed-rate loans increased 12bps to 4.99%, the highest since July 2009. The rate on a 30-year Jumbo mortgage jumped up 15bps to 5.20%, the highest since May 2011. The rate on a 5-year ARM increased 20bps to 4.74%, the highest rate for the series dating back to January 2011.

Applications for fixed-rate loans rose for the second consecutive week, edging up 0.3% w/w (-53.5% y/y) in the week ended May 6 after a 2.5% w/w gain in the previous week, which had been their first rise since early March. Applications for adjustable-rate mortgages jumped up 19.0% w/w (+41.7% y/y) in the latest week following a 2.3% weekly increase in the prior week.

The average size of a mortgage loan rose 2.4% w/w to $401,900, a series high dating back to January 2011. The average size of a loan for purchase edged up 0.4% w/w to $449,800 while the average size of a refinanced loan increased 6.5% w/w to $302,000 after having fallen in five of the previous six weeks.

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 SURVEYS database.

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