Mortgage Apps: Finish '22 At Record Low

Bottom Line:  Mortgage applications fell sharply in the final week of the year as mortgage rates edged higher, ending a year of historic upward moves in mortgage rates and record declines in mortgage applications. While the seasonal adjustment factors can be difficult in the week between Christmas and New Years, there is no debating that mortgage activity all but turned off in the final two months of the year after the average 30-year fixed-rate mortgage eclipsed 7%. That said, there were hints of a rate impulse, with applications picking up just slightly when rates declined in early December. As we potentially near the end of the Fed rate hiking cycle, this will be important to watch in early 2023 if mortgage rates prove to have topped out.The MBA Mortgage Application Index FELL sharply , DOWN -10.3% to 184.0, BELOW the 13-week average of 205.0 and -67.8% BELOW the year-ago level. Non-seasonally adjusted the index FELL sharply , DOWN -20.5%. The Purchase Index FELL sharply, DOWN from -12.0% to 160.0, BELOW the 13-week average of 171.0 and -42.2% BELOW the year-ago level.The Refinancing Index FELL -4.4% to 311.0, BELOW the 13-week average of 364.0 and -86.8% BELOW the year-ago level.The effective (adjusted for points paid) 30-year mortgage rate ROSE 18bps to 6.79%, BELOW the 13-week average of 6.93% but 96bps ABOVE the year-ago level.Current coupon yields in the secondary market were up 19.0 bps last week, closing at 5.39%, but were down -8.0 bps this week through Tuesday.