Weekly Mortgage Applications Decrease, While Loan Size Sets Record

An empty mortgage application form with house key.
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For the week ending Feb. 11, mortgage applications decreased 5.4% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week. In addition, the average purchase loan size was a record $453,000.

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“Mortgage rates increased across the board last week following the recent rise in Treasury yields, which have moved higher due to unrelenting inflationary pressures and increased market expectations of more aggressive policy moves by the Federal Reserve,” Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, shared in the press release. “The 30-year fixed rate saw the largest single-week increase since March 2020 and was above the 4 percent mark for the first time since 2019. Consistent with this period of higher mortgage rates, refinance applications fell 9 percent last week and stood at around half of last year’s pace. The refinance share of applications was also at its lowest level since July 2019.”

Home prices have been climbing steadily as demand continues to outstrip the supply of houses for sale, and while the increase had moderated at the end of last summer, they are now widening again. Prices were up 18% year over year across the country for the fourth quarter of 2021, according to CoreLogic, but gains should level out to a 3.5% annual increase by the end of 2022.

The Refinance Index decreased 9% from the previous week and was 54% lower than the same week one year ago, while the seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index increased 5% compared with the previous week and was 7% lower than the same week one year ago, the MBA reported in the release.

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“Purchase applications saw a modest decline over the week, with government purchase applications accounting for most of the decrease. Prospective buyers still face elevated sales prices in addition to higher mortgage rates. The heavier mix of conventional applications again contributed to another record average loan size at $453,000,” Kan noted in the release.

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In addition, the MBA said that the refinance share of mortgage activity decreased to 52.8% of total applications from 56.2% the previous week, while the adjustable-rate mortgage (ARM) share of activity increased to 5% of total applications. 

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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