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Mortgage Apps: Second Week of Sharp Declines

February 23, 2022
Bottom Line:    Mortgage applications fell further last week as the average 30-year mortgage rate held over 4% for the second week in a row. Secondary mortgage market spreads remained wider, holding over 100bps to a blend of Treasuries. Purchase applications fell notably with that index nearing the lowest levels since the pandemic.  Overall, the trend in total applications has been slower since September, when average effective mortgage rates first started to move higher. Refinancing activity has closely tracked rates and is now back to early 2020 levels. Purchase activity meanwhile had been proving more resilient to higher rates but is now starting to fall. This bears watching as homeowners start to think about the spring and early summer selling season.
The MBA Mortgage Application Index FELL sharply, DOWN -13.1% to 466.0, BELOW the 13-week average of 577.0 and -41.0% BELOW the year-ago level. Non-seasonally adjusted the index FELL -11.1%.
 
The Purchase Index FELL sharply, DOWN -10.1% to 251.0, BELOW the 13-week average of 292.0 and -5.4% BELOW the year-ago level.
The Refinancing Index FELL sharply, DOWN -15.6% to 1678.0, BELOW the 13-week average of 2243.0 and -56.4% BELOW the year-ago level.
The effective (adjusted for points paid) 30-year mortgage rate ROSE slightly, UP 2bps to 4.2%, ABOVE the 13-week average of 3.69% and 30bps ABOVE the year-ago level.
Article by Contingent Macro Advisors