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Economy in Brief

U.S. Mortgage Applications Reverse Prior Week's Increase
by Carol Stone, CBE  September 28, 2022

• Total mortgage applications decrease 3.7% in the week of September 23.

• Applications for loans to purchase and to refinance both decreased.

• The average effective rates on all mortgage types advanced in the September 23 week.

Mortgage applications fell 3.7% w/w (-65.3% y/y) in the week ended September 23, basically reversing the previous week's increase; that increase had been the first in five weeks. These data come from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house eased 0.4% (-28.9% y/y) in the September 23 week after a 1.0% increase the week before, while applications for refinancing a loan dropped 10.9% (-84.4% y/y) also reversing the prior week's increase, which was +10.4%.

The share of applications for refinancing an existing loan decreased to 30.2% in the week ended September 23, from 32.5% in the week ended September 16. The percentage of applications that were ARMs rose to 10.4% in the latest week, the largest since mid-June.

Applications for fixed-rate loans decreased 5.1% in the September 23 week, following a 3.7% w/w increase in the September 16 week. Applications for adjustable-rate mortgages rose 9.5% after their 4.0% w/w increase in the prior week.

The effective rate on a 30-year fixed-rate loan was 6.86% in the week ended September 23, up 41 basis points in the week and the highest since July 2007. The rate on 15-year fixed-rate mortgages increased 36bps to 6.03%, its highest since October 2008, and the rate on 30-year Jumbo loan jumped 29bps to 6.21%. The rate on the 5-year ARM was up 26bps to 5.77%.

The average loan size advanced 1.0% to $369,400 in the week of September 23. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan actually decreased slightly, 0.4% w/w, to $411,700 from the prior week's $413,200. The average loan size to refinance a mortgage increased 1.7% w/w to $271,800 in the September 23 week.

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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