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Economy in Brief

U.S. Mortgage Applications Decline Further
by Tom Moeller  October 19, 2022

• Total applications equal May 1997 low.

• Purchase and refinancing applications both weaken.

• 30-year fixed-rate mortgage hits 20-year high.

Mortgage applications dropped 4.5% (-68.3% y/y) in the week ended October 14, following a 2.0% decline during the prior week. Applications have fallen by roughly three-quarters from the early-2021. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 3.7% (-38.3% y/y) after a 2.1% decline. Applications for refinancing a loan declined 6.8% (-85.9% y/y), the third consecutive weekly decline.

The share of applications for refinancing an existing loan eased to 28.3% in the week of October 14 from 29.0% in the prior week. The percentage of applications that were ARMs rose to 12.8% from 11.7% in the week prior.

The effective rate on a 30-year fixed-rate loan was 7.21% last week, up from 7.09% in the prior week. It was the highest since April 2002. The rate on 15-year fixed-rate mortgages eased to 6.39% from 6.44% which was the highest rate since October 2008. The rate on 30-year Jumbo loan rose to 6.50% from 6.42%, while the rate on a 5-year ARM rose to 5.98% from a low of 2.55% in September 2021.

The average loan size increased to $366,600 in the week of October 14 from $360,400. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan edged higher to $402,600 from $399,100 in the prior week. The average loan size to refinance a mortgage rose to $275,200 last week from $265,600 in the week prior.

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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