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Economy in Brief

U.S. Mortgage Applications Plummet in the Latest Week
by Kathleen Stephansen, CBE  October 5, 2022

• Total mortgage applications plunged 14.2% in the week of September 30.

• Applications for loans to purchase and to refinance both decreased.

• The average effective rates on fixed-rate loans rose to multi-year highs.

Mortgage applications plunged 14.2% (-68.0% y/y) in the week ended September 30, after a decline of 3.7% w/w (-65.3% y/y) in the week ended September 23. These data come from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house dropped 12.6% (-36.9% y/y) in the September 30 week after a 0.4% (-28.9% y/y) decline in the September 23, while applications for refinancing a loan plummeted 17.8% (-85.8% y/y) following the 10.9% (-84.4% y/y) drop in the prior week's increase.

The share of applications for refinancing an existing loan decreased to 29.0% in the week of September 30, from 30.2% in the week ended September 23. The percentage of applications that were ARMs rose to 11.8% in the latest week from 10.4% the week prior.

The effective rate on a 30-year fixed-rate loan was 7.03% in the week ended September 30, up 17bps in the week and the highest since July 2006. The rate on 15-year fixed-rate mortgages increased 20bps to 6.23%, its highest since October 2008, and the rate on 30-year Jumbo loan jumped 16bps to 6.37%. The rate on the 5-year ARM fell 3bps to 5.74%.

The average loan size decreased 1.2% w/w to $364,800 in the week of September 30. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan decreased 1.3% w/w, to $406,200 from the prior week's $411,700. The average loan size to refinance a mortgage dropped 3.1% w/w to $263,300 in the September 30 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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