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Economy in Brief

U.S. Mortgage Applications Rise with More Loans to Purchase a House
by Carol Stone, CBE  November 16, 2022

• Purchase applications strongest since June.

• Applications for loan refinancing extend downtrend.

• Mortgage rates decline, but still above end-2021 levels.

The Mortgage Bankers Association reported that mortgage applications rose 2.7% (-67.9% y/y) in the week ended November 11 after edging down 0.1% in the prior week. Applications for loans to purchase a home rose 4.4% last week (-39.9% y/y) after the prior week’s 1.3% increase and marked the strongest advance since mid-June. Applications for refinancing a loan fell again, down 1.6% (-86.4% y/y) following a 3.5% reduction the week before.

The share of applications for refinancing an existing loan decreased to 27.6% in the week of November 11. That remained down from roundly 65% during the last weeks of 2021. The percentage of ARM applications was 10.6% in the latest week, down from 12.0% the week prior.

The effective rate on a 30-year fixed-rate loan was 7.06% last week versus 7.36% in the prior week and still up significantly from 3.39% in December of last year. The rate on 15-year fixed-rate mortgages eased to 6.45% from 6.68% the week before. The rate on 30-year Jumbo loans eased to 6.70%. The rate on the 5-year ARM declined to 5.97% in the November 11 wee, down from 6.21% the week before, but still much higher than 2.57% at the end of last year.

The average loan size decreased to $355,700 (3.4% y/y) in the week of November 11. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan decreased to $389,400 (-4.2% y/y). The average size of a loan to refinance a mortgage decreased to $267,600 (-12.9% 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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