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Economy in Brief

U.S. Mortgage Applications Decrease Modestly Across the Market
by Carol Stone, CBE  September 8, 2021

• Applications to purchase a house and to refinance a loan edged lower.

• Rates a bit lower for most types of mortgages.

• Fixed-rate loans and ARMs decrease in size.

The Mortgage Bankers Association's Loan Applications Index decreased 1.9% (-9.2% y/y) in the week ended September 3, following a 2.4% decline the week before. Applications for purchase edged down 0.2% (-18.7% y/y) after increasing 0.6% in the August 27 week. Applications for refinancing fell 2.8% (-3.6% y/y) after decreasing 3.8% in the prior week.

The share of applications for refinancing was steady at 66.8% in the September 3rd week compared to the week before. The adjustable-rate mortgage (ARM) share of activity was down to 2.5% from the prior week's 3.2%; its recent high was 4.0% in mid-May.

The effective interest rate on a 30-year mortgage edged down to 3.12% last week after edging up 2 basis points to 3.13% in the previous week. The effective 15-year rate was 2.43% in the September 3rd week, down from 2.47%. The effective rate for a 30-year Jumbo mortgage loan rose to 3.23% from 3.21%. In contrast, the rate on a 5-year adjustable-rate loan dropped to 2.62% from 2.85%. These last series date back only to January 2011, while the others begin in January 1990.

Applications for fixed-rate loans decreased 1.2% (-9.4% y/y) in the week ended September 3 following a 2.5% decrease the week before. Applications for adjustable-rate mortgages dropped 23.8% (+1.3% y/y) following a 2.3% increase in the prior week.

The average size of mortgage loans was $329,200 last week, down from $335,900 the week before. The size of loans to purchase was $389,800 in the September 3 week, down from $396,500 the previous week. The average size of refinance loans also decreased, falling to $299,200 from $305,800 in the August 27 week.

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) 09/03/21 08/27/21 08/20/21 Y/Y 2020 2019 2018
Total Market Index -1.9 -2.4 1.6 -9.2 63.0 32.4 -10.4
  Purchase -0.2 0.6 3.0 -18.7 11.4 6.6 2.1
  Refinancing -2.8 -3.8 0.9 -3.6 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.12 3.13 3.11 3.19

(Sep '20)

3.40 4.34 4.94
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