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Economy in Brief

U.S. Mortgage Applications Are Little Changed Even As Rates Rise
by Tom Moeller  November 9, 2022

• Purchase applications rise sharply following several weekly declines.

• Applications for loan refinancing continue to fall.

• Mortgage rates reverse earlier decline.

The Mortgage Bankers Association reported that mortgage applications eased 0.1% (-69.6% y/y) in the week ended November 4 after a 0.5% decline during the prior week. Applications for loans to purchase a home rose 1.3% last week (-41.6% y/y) following six straight weeks of decline. They were near the lowest level since January-2015. Applications for refinancing a loan weakened 3.5% (-86.9% y/y) following a 0.2% uptick in the prior week. They were at the lowest level since January 2000.

The share of applications for refinancing an existing loan rose to 28.1% in the week of November 4. That remained down from 65% late in 2021. The percentage of ARM applications was 12.0% in the latest week compared to 11.8% the week prior.

The effective rate on a 30-year fixed-rate loan was 7.36% last week versus 7.27% in the prior week, up significantly from 3.39% in December of last year. The rate on 15-year fixed-rate mortgages of 6.68% compared to 6.77% two weeks earlier. The rate on 30-year Jumbo loans eased to 6.72%. The rate on the 5-year ARM rose to 6.21%, up from 2.82% at yearend 2021.

The average loan size increased to $368,100 (8.3% y/y) in the week of November 4. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan rose to $403,300 (-1.5% y/y). The average loan size to refinance a mortgage increased to $277,000 (-7.4% y/y).

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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