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Economy in Brief

U.S. Mortgage Applications Decline Further
by Tom Moeller  June 1, 2022

• Loan refinancing continues to fall sharply.

• Purchase applications slip.

• Interest rates ease.

The Mortgage Bankers Association's Loan Applications Index weakened 2.3% (-53.7% y/y) in the week ended May 27 after declining 1.2% in the prior week. Applications to refinance an existing loan continued to lead the decline with 5.4% drop (-75.1% y/y) after falling 3.9% in the week earlier. Applications for purchase eased 0.6% (-14.3% y/y) after rising 0.2% in the prior week.

The share of applications for refinancing fell to 31.5% in the week ended May 27, half the percentage in December 2021 and nearly the lowest reading since December 2000. The percentage that were ARMs fell to 8.7%

Applications for fixed-rate loans fell 1.5% (-56.1% y/y) in the week ended May 27. Meanwhile, applications for adjustable-rate mortgages fell 10.1% (+8.0% y/y).

The effective rate on 30-year fixed-rate loans fell to 5.48% last from 5.64% in the prior week. It remained near the highest reading since June 2009. The rate for 15-year fixed mortgages slipped to 4.75% and for 30-year Jumbos slipped to 5.05%. The rate on 5-year ARMs was little-changed w/w at 4.71%, up from 2.57% at the end of last year.

The average loan size of $385,600 was down sharply from $401,900 at the beginning of the month. The average size of a purchase loan rose slightly to $433,200. The average refinancing loan size was $282,100.

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.

These figures for weekly mortgage applications and interest rates are available in Haver's SURVEYS database.

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