U.S. Mortgage Applications Fall to 22-year Low
by:Sandy Batten
|in:Economy in Brief
Summary
- Fourth consecutive weekly decline in total applications.
- Index fell to lowest level since February 2000.
- Interest rates resumed rise.
The Mortgage Bankers Association's Loan Applications Index fell 6.5% w/w (-55.3 y/y) in the week ended June 3, their fourth consecutive weekly decline, following a 2.3% w/w decline in the previous week. Applications for purchase slumped 7.1% w/w (-20.6% y/y) versus a 0.6% w/w decline in the prior week. Refinancing applications fell 5.6% w/w (-75.3% y/y), their twelfth decline in the past 13 weeks, on top of a 5.4% w/w decline in the previous week.
The share of applications for refinancing rose to 32.2% in the week ended June 3 from 31.5% in the previous week. However, this share has generally fallen in 2022 from around 65% at the beginning of this year. The percentage that were ARMs fell for the fourth consecutive week to 8.2%
Applications for fixed-rate loans fell 6.0% w/w (-57.3% y/y) in the week ended June 3 following a 1.5% weekly decline in the previous week. Meanwhile, applications for adjustable-rate mortgages plunged 11.5% w/w (-6.8% y/y), their third double-digit weekly decline in the past four weeks.
After having declined in four of the previous five weeks, the effective rate on 30-year fixed-rate loans rose nine basis points to 5.57% in the week ended June 3. The rate on 15-year fixed-rate mortgages edged up three basis points to 4.78% and the rate on 30-year Jumbos increased six basis points to 5.11%. The rate on 5-year ARMs rose five basis points to 4.76%, up markedly from 2.57% at the end of last year.
The average loan size fell 1.5% w/w to $380,000 in the week ended June 3. It has fallen from $401,900 over the past month. The average size of a purchase loan declined 1.5% w/w to $426,900, its lowest level since mid-January. The average refinancing loan size edged down 0.2% w/w to $281,500.
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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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