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Economy in Brief

U.S. Mortgage Applications Continue in Steep Decline
by Carol Stone, CBE  October 26, 2022

• Total applications lowest since April 1997.

• Purchase applications decrease again; refinance loan volume holds steady.

• Effective rate on 30-year fixed-rate mortgages up another 21 basis points.

Mortgage applications decreased 1.7% (-68.8% y/y) in the week ended October 21, following a 4.5% decline during the prior week. The volume of applications has fallen by roughly three-quarters from early 2021. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 2.3% (-41.8% y/y) after a 3.7% decline. The volume of applications for refinancing a loan were unchanged (-85.7% y/y) in the latest week following four consecutive weekly declines.

The share of applications for refinancing an existing loan rose to 28.8% in the week of October 21 from 28.3% in the prior week. The percentage of applications that were ARMs eased to 12.7% from 12.8% in the week prior.

The effective rate on a 30-year fixed-rate loan was 7.42% last week, up from 7.21% in the prior week. It was the highest since December 2001. The rate on 15-year fixed-rate mortgages surged to 6.77%; it had actually eased the prior week to 6.39% from 6.44% the week before that. The 6.77% rate was the highest since 6.95% in March 2002. The rate on 30-year Jumbo loans rose to 6.72% from 6.50%, and the rate on a 5-year ARM rose to 6.18% from 5.98% the week before and compares to a low of 2.55% in September 2021.

The average loan size decreased to $362,900 in the week of October 21 from $366,600 the week before. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan was $402,400 in the latest week, down just barely from $402,600 the week before. The average loan size to refinance a mortgage fell to $265,000 last week from $275,200 the week before.

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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