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Economy in Brief

U.S. Mortgage Applications Decline As Rates Rise
by Tom Moeller  February 9, 2022

• Total applications fall for second week in last three.

• Decline in purchase applications outpaces refinancings.

• 30-year mortgage interest rates continue to increase.

The Mortgage Bankers Association's Loan Applications Index declined 8.1% in the week ended February 4 (-39.6% y/y) following a 12.0% increase in the prior week. Applications to purchase a home declined 9.6% (-11.4% y/y) after rising 4.0% in the week ended January 28. Refinancing applications weakened 7.3% and last week were down roughly one-half y/y. The latest decline was the fourth in the last five weeks.

The share of applications for refinancing fell to 56.2% in the week ended February 4 from 57.3% in the previous week. These shares were down from 64.3% averaged in December. The adjustable-rate mortgage (ARM) share of activity held steady at 4.5%.

The effective interest rate on a 30-year mortgage rose to 3.95% in the week ended February 4 from 3.89% in the prior week. It has increased from a 2.95% low in mid-December 2020. The effective rate on a 15-year mortgage increased to 3.28% from 3.11% in the previous week, while the rate on a Jumbo 30-year mortgage rose to 3.72% from 3.68%. The interest rate on a 5-year adjustable-rate mortgage rose four basis points to 3.26%.

Applications for fixed-rate loans fell 8.1% last week (-41.0% y/y) after an 11.8% increase in the previous week. Applications for adjustable-rate mortgages weakened 8.4% (+19.2% y/y) after a 14.6% rise in the previous week.

The average size of a mortgage loan rose to $366,200 (10.5% y/y) in the week ended February 4 from $365,300 in the previous week. The average size of a loan for purchase rose to a record $466,900 (11.1% y/y) from $441,100 in the previous week. The average size of a refinanced loan fell to $303,400 (+0.7% y/y) from $308,700 in the previous week.

This survey covers over 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 SURVEYW database.

MBA Mortgage Applications (%, SA) 02/04/22 01/28/22 01/21/22 Y/Y 2021 2020 2019
Total Market Index -8.1 12.0 -7.1 -39.6 -8.0 63.0 32.4
  Purchase -9.6 4.0 -1.8 -11.4 -2.3 11.4 6.6
  Refinancing -7.3 18.4 -12.6 -52.0 -10.7 111.0 71.1
30-Year Effective Mortgage Interest Rate (%) 3.95 3.89 3.85 3.19

(Feb. '21)

3.25 3.40 4.34
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