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Mortgage Apps: Only Slight Decline Amid Higher Rates

March 16, 2022
Bottom Line:    Mortgage applications fell only slightly amid continued mortgage rates volatility as the average effective 30-year rate jumped 20bps to 4.42% last week. While the trends in both refinancing and purchase applications remain lower, purchase applications have proven remarkably resilient amid higher rates. Ahead of today's FOMC meeting, where they will almost surely hike 25bps, mortgage rates were notably higher. Current coupon yields in the secondary market were up 31.0 bps last week, closing at 3.07%, and were up 19.0 bps this week through Tuesday. Markets will be listening closely to any guidance on the Fed's balance sheet, especially the mortgage holdings. But guidance might be limited until they have more conclusions at the May meeting.
The MBA Mortgage Application Index FELL slightly, DOWN -1.2% to 496.0, BELOW the 13-week average of 550.0 and -35.2% BELOW the year-ago level. Non-seasonally adjusted the index was nearly unchanged, DOWN -0.6%.
The Purchase Index ROSE slightly, UP 0.7% to 270.0, BELOW the 13-week average of 282.0 and -8.4% BELOW the year-ago level.
The Refinancing Index FELL -2.8% to 1778.0, BELOW the 13-week average of 2098.0 and -49.3% BELOW the year-ago level.
The effective (adjusted for points paid) 30-year mortgage rate ROSE sharply, UP 20bps to 4.42%, ABOVE the 13-week average of 3.9%, and 30bps ABOVE the year-ago level. 
Article by Contingent Macro Advisors