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Economy in Brief

U.S. Mortgage Applications Slumped
by Sandy Batten  June 30, 2021

• Total application volume fell to lowest level since January 2020.

• Applications for both purchase and refinance declined.

• Rates on fixed-rate mortgages generally edged down, rates on adjustable-rate loans jumped.

The Mortgage Bankers Association's Loan Applications Index fell 6.9% w/w (-15.8% y/y) in the week ended June 25 after having increased in each of the previous two weeks. This decline pushed total applications to their lowest level since early January 2020. Applications to purchase a home declined 4.8% w/w (-17.3% y/y) after increasing 0.6% w/w in the previous week. Applications for refinancing slumped 8.2% w/w (-15.0% y/y) following a 2.8% w/w increase in the previous week.

The number of applications for refinancing slipped to 61.9% of total applications in the June 25 week from 62.5% the week before. That share is down from 73.1% during all of last December. The adjustable-rate mortgage (ARM) share of activity fell to 3.6%, the lowest since April 23, from 3.9% in the previous week.

The effective interest rate on a 30-year mortgage was unchanged at 3.32% in the latest week, the highest rate since April 9. The series low was 2.95% in the weeks of December 11 and 18, 2020. The recent high was 3.48% the week of March 19. The effective 15-year rate edged down two basis points to 2.65% following a 12-basis-point jump in the previous week. The effective rate for a 30-year Jumbo mortgage declined seven basis points to 3.32%, more than reversing the five-basis-point increase in the previous week. By contrast, the rate on a 5-year ARM jumped 29 basis points to 3.07%, the highest since April 2.

The average mortgage loan size fell 0.5% w/w to $338,600 in the June 25 week. The average size of a loan to purchase a house increased 1.6% w/w to $405,000 while the average size of a refinancing loan fell 2.5% w/w to $297,700.

Applications for fixed-rate loans fell 6.6% w/w (-16.2% y/y) in the week ended June 25, the first decline in three weeks. Applications for adjustable-rate mortgages collapsed 14.6% w/w (-4.5% y/y), their 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) 06/25/21 06/18/21 06/11/21 Y/Y 2020 2019 2018
Total Market Index -6.9 2.1 4.2 -15.8 63.0 32.4 -10.4
  Purchase -4.8 0.6 1.6 -17.3 11.4 6.6 2.1
  Refinancing -8.2 2.8 5.5 -15.0 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.32 3.32 3.22 3.41

(Jun '20)

3.40 4.34 4.94
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