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Economy in Brief

U.S. Mortgage Applications Continue to Weaken
by Tom Moeller  May 25, 2022

• Loan refinancing declines sharply.

• Purchase applications ease.

• Interest rates edge lower.

The Mortgage Bankers Association's Loan Applications Index fell 1.2% (-54.5% y/y) in the week ended May 20 after declining 11.0% in the prior week. Applications to refinance an existing loan continued to lead the decline with 3.9% drop (-74.9% y/y) after falling 9.5% in the week earlier. Applications for purchase improved 0.2% (-16.4% y/y) after falling 11.9% in the prior week.

The share of applications for refinancing fell to 32.3% in the week ended May 20. That as half the percentage this past December and nearly the lowest reading since December 2000. The percentage that were ARMs fell to 9.4%

Applications for fixed-rate loans eased 0.3% (-57.1% y/y) in the week ended May 20. Meanwhile, applications for adjustable-rate mortgages fell 9.6% (+6.1% y/y).

The effective rate on 30-year fixed-rate loans slipped to 5.64% in the latest week from 5.70% in the prior week. It remained near the highest reading since June 2009. The rate for 15-year fixed mortgages slipped to 4.89% and for 30-year jumbos it eased to 5.14%. The rate on 5-year ARMs rose to 4.77%, up from 2.57% at the end of last year.

The average loan size of $383,000 as down sharply from $401,900 at the beginning of the month. The average size of a purchase loan fell to $432,000 from a high of $460,000 in the third week of March. The average refinancing loan size as $280,100, down from $302,000 at the beginning of the month.

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.

These figures for weekly mortgage applications and interest rates are available in Haver's SURVEYS database.

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