U.S. Mortgage Applications Rebounded to Start New Year
by:Sandy Batten
|in:Economy in Brief
Summary
- Purchase applications rose while refinancing applications slipped for second week.
- 30-year mortgage interest rate jumped 18bps to highest since March 2020.
The Mortgage Bankers Association's Loan Applications Index rebounded in the week ended January 7, rising 1.4% w/w (-39.8% y/y) following a 5.6% w/w decline in the previous week. Purchase applications increased 2.2% w/w (-16.4% y/y) after a 10.2% w/w fall in the previous week. Applications for loans to refinance slipped 0.1% w/w (-50.1% y/y) on top of a 2.5% w/w decline in the previous week.
The share of applications for refinancing fell to 64.1% in the week ended January 7 from 65.4% in the previous week. The adjustable-rate mortgage (ARM) share of activity slid to 3.1% in the first week of 2022 from 3.3% in the prior week.
The effective interest rate on a 30-year mortgage jumped up to 3.65% in the week ended January 7, the highest since March 2020, from 3.47% in the previous week. The effective rate on a 15-year mortgage rose 14bps to 2.82% while the rate on a Jumbo 30-year mortgage increased 11bps to 3.53%. The interest rate on a 5-year adjustable-rate mortgage soared 53bps to 3.10%, more than reversing its 25bp decline in the previous week.
Applications for fixed-rate loans rose 1.5% w/w (-40.8% y/y) in the first week of 2022 after a 5.4% w/w fall in the previous week. Applications for ARMs fell 3.3% w/w (+15.9% y/y) on top of a 13.7% w/w decline in the prior week.
The average size of a mortgage loan increased 1.9% w/w in the week ended January 7 to $338,000 following a 5.3% w/w decline to $331,600 in the previous week. The average size of a loan for purchase was essentially unchanged at $401,700 in the latest week versus $401,600 one week earlier. The average size of a refinanced loan rebounded, rising 2.6% w/w to $302,300 in the latest week from $294,600 in the prior 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
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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