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Economy in Brief

U.S. Mortgage Applications Remain on a Downtrend
by Kathleen Stephansen, CBE  September 14, 2022

• Total mortgage applications fell in the latest week.

• Applications for adjustable-rate mortgages jumped 5.2%.

• The effective rate on a 5-year ARM dropped while all other mortgage interest rates rose in the week of September 9.

Mortgage applications dropped 1.2% w/w (-64.0% y/y) in the week of September 9, following a 0.8% w/w (-63.4% y/y) decline in the week of September 2, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. This was the fifth consecutive weekly decline in applications to the lowest level since December 1999. Purchase applications edged up 0.2% w/w (-28.7% y/y) in the September 9 week, while applications for refinancing fell 4.2% w/w (-83.3% y/y).

The share of applications for refinancing an existing loan edged down to 30.2% in the week ended September 9, from 30.7% in the week ended September 2. The percentage of applications that were ARMs rose to 9.10% from 8.5% the week prior.

Applications for fixed-rate loans declined 1.8% w/w in the September 9 week, following a 0.8% w/w decline in the previous week. Applications for adjustable-rate mortgages jumped 5.2% w/w after a 0.7% w/w decline in the prior week.

The effective rate on a 30-year fixed-rate loan rose 6bps to 6.23% in the week ended September 9, reaching its highest level since November 2008. The rate on 15-year fixed-rate mortgages rose 8bps to 5.52%, its highest also since November 2008, and the rate on 30-year Jumbo loan increased 10bps to 5.67%. Bucking the trend, the rate on the 5-year ARM dropped 12bps to 5.02%.

The average loan size edged down 0.5% w/w to $365,700 in the week of September 9. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan declined 1.5% w/w to $405,000. The average refinancing loan size rose 2.2% w/w to $275,000 in the September 9 week.

The Mortgage Bankers Survey covers 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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