MetroIntelligence Economic Update by P. DUFFY
Real gross domestic product (GDP) decreased at an annual rate of 1.4 percent in the first quarter of 2022 versus an expectation of a 1.0 percent gain. In the fourth quarter, real GDP increased 6.9 percent. The decrease in real GDP reflected decreases in private inventory investment (especially motor vehicles), exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP and lead to a higher trade deficit, increased. Personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment increased.
National median mortgage payment rises 5.0 percent in March and 22.8 percent year-on-year
The national Purchase Applications Payment Index (PAPI) increased 5.0 percent to 150.9 in March ($1,736 per month) from 143.7 in February ($1,653 per month) meaning payments on new mortgages take up a larger share of a typical person’s income. Compared to March 2021 (122.9), the index jumped 22.8 percent. MBA’s updated forecast calls for an annual decline in existing sales, higher home prices and mortgage rates, and a smaller, but solid 4 percent gain in purchase origination volume.
Purchase loan apps fall 8 percent from previous week and 17 percent year-on-year
The Market Composite Index for mortgage applications decreased 8.3 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 8 percent (and down 17 percent year-on-year) and refinance activity falling 9 percent (and down 71 perent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages increased to 5.37 percent from 5.20 percent,