Mortgage Applications Collapse Most Since March 2020 COVID Crisis

Mortgage applications collapsed 13.1% week-over-week, the worst drop since the heart of the COVID lockdown crisis in March 2020…

Source: Bloomberg

As MBA reports, the Refinance Index plunged 16% from the previous week and was 56% lower than the same week one year ago.

But most notably, the seasonally adjusted Purchase Index tumbled 10% from one week earlier – after holding up for a few weeks amid rising rates. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 6 percent lower than the same week one year ago.

Source: Bloomberg

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, warned:

“Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high,” adding that “higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022. Conventional refinances in particular saw a 17 percent decrease last week.”

More