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Economy in Brief

U.S. Mortgage Loan Applications Drop
by Tom Moeller  May 6, 2021

• Fewer refinancings lead decline as purchase applications rise.

• Mortgage interest rates edge higher.

The Mortgage Bankers Association's Loan Applications Index fell 4.2% (-7.1% y/y) in the week ended May 21, following a 1.2% rise in the previous week. Applications for refinancing weakened 7.2% (-8.6% y/y) after a 4.0% increase in the previous week. Applications to purchase a home rose 1.7% (-4.1% y/y) after falling 4.1% in the previous week.

The refinance share of mortgage activity fell to 61.4% of total applications in the week ended May 21, from 63.3% in the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 4.0% last week from 3.9% in the previous week, remaining well above the January 8 low of 1.6%.

The effective interest rate on a 30-year mortgage rose two basis points to 3.28% and remained above its 2.95% low reached in December. Conversely, the effective 15-year rate fell two basis points to 2.60%. The effective rate for a 30-year Jumbo mortgage held steady at 3.39%. The rate on a five-year ARM rose to 2.92% from 2.67%, though remained below its 4.61% high in October 2018.

The average mortgage loan size held steady w/w (7.5% y/y) at $338,500 in the May 21 week. The average size of a loan to purchase a house again slipped 0.4% (+20.4% y/y) to $409,700. The average size of a refinanced loan declined 0.8% (-2.0% y/y) to $293,700.

Applications for fixed-rate loans fell 4.3% (-7.6% y/y) after two weeks of increase. Applications for adjustable-rate mortgages edged 1.5% lower (+8.7% y/y), the first decline in four weeks.

This survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.

MBA Mortgage Applications (%, SA) 05/21/21 05/14/21 05/07/21 Y/Y 2020 2019 2018
Total Market Index -4.2 1.2 2.1 -7.1 63.0 32.4 -10.4
  Purchase 1.7 -4.1 0.8 -4.1 11.4 6.6 2.1
  Refinancing -7.2 4.0 2.9 -8.6 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.28 3.26 3.21 3.5

(May '20)

3.40 4.34 4.94
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