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Economy in Brief

U.S. Mortgage Applications Continued to Rise, but only Slightly
by Sandy Batten  June 29, 2022

• Loan applications increased for third consecutive week.

• Refinancing applications rebounded while purchase applications were essentially unchanged.

• Interest rates eased slightly.

The Mortgage Bankers Association reported that mortgage applications edged up 0.7% w/w (-49.5% y/y) in the week ended June 24 following a 4.2% w/w gain in the previous week. This was their third consecutive weekly increase after four consecutive weekly declines. In contrast to the gain in the previous week, the increase in the most recent week was led by refinancing applications, which rose 1.9% w/w (-74.6% y/y) after having fallen 3.1% w/w in the prior week. Applications for home purchase were essentially unchanged last week, edging up just 0.1% w/w (-4.7% y/y) following a 7.9% w/w jump in the previous week.

The share of applications for refinancing rose to 30.3% in the week ended June 24 from 29.7% in the previous week. This percentage has generally declined during 2022. The percentage of applications that were ARMs fell to 10.1% after having jumped to 10.6% in the previous week.

Applications for fixed-rate loans rose 1.3% w/w (-52.9% y/y) in the June 24 week, the same weekly rise as in the prior week. Applications for adjustable-rate mortgages fell 4.4% w/w (+41.2% y/y) after surging 36.6% w/w in the previous week.

The effective interest rate on 30-year fixed-rate loans declined to 6.02% in the week of June 24 from 6.20% in the prior week. This was the first weekly decrease in the past four weeks. This rate has increased 255 basis points since the end of 2021. The rate on 15-year fixed-rate mortgages slipped two basis points to 5.24%. The rate on 30-year Jumbos declined 12 basis points to 5.50% while the rate on 5-year ARMs fell 18 basis points to 4.91%%.

The average loan size decreased 3.1% w/w to $371,000 in the week of June 24. It has fallen from a series high of $401,900 reached in the week ended May 6. The average size of a purchase loan fell 2.0% w/w to $413,500. The average refinancing loan size slumped 5.8% w/w to $273,300.

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.

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

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