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Economy in Brief

U.S. Mortgage Applications Continue to Decline
by Kathleen Stephansen, CBE  October 12, 2022

• Total mortgage applications declined 2.0% in the week of October 7.

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

• The effective rate on a 30-year fixed-rate loan hit a 20-year high.

Mortgage applications dropped 2.0% (-68.8% y/y) in the week ended October 7, following the 14.2% (-68.0% y/y) plunge in the week ended September 30. These data come from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 2.1% (-39.1% y/y) after the 12.6% (-36.9% y/y) drop in the September 30 week, while applications for refinancing a loan declined 1.8% (-86.0% y/y) on top of the 17.8% (-85.8% y/y) fall in the prior week.

The share of applications for refinancing an existing loan remained at 29.0% in the week of October 7, unchanged from the week of September 30. The percentage of applications that were ARMs edged down to 11.7% from 11.8% the week prior.

The effective rate on a 30-year fixed-rate loan was 7.09% in the week ended October 7, up 6bps in the week, and the highest since April 2002. The rate on 15-year fixed-rate mortgages increased 21bps to 6.44%, its highest since October 2008, while the rate on 30-year Jumbo loan rose 5bps to 6.42%. The rate on the 5-year ARM jumped 15bps to 5.89%.

The average loan size decreased 1.2% w/w to $360,400 in the week of October 7 from the prior week's $364,800. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan decreased 1.7% w/w, to $399,100 from the prior week's loan size of $406,200. The average loan size to refinance a mortgage rose 0.9% w/w to $265,600 in the week of October 7, from $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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