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Economy in Brief

U.S. Mortgage Applications Decrease
by Carol Stone, CBE  December 1, 2021

• Volume of loans for refinancings fall while loans to purchase a house increase.

• 30-year mortgage rate edges up again.

• Purchase loan size increases further.

The Mortgage Bankers Association's Loan Applications Index declined 7.2% (-29.6% y/y) in the week ended November 26, more than offsetting a 1.8% increase the week before. Notably, the decline in the latest week came in applications for loans to refinance, which fell 14.8% (-40.8% y/y), following a slim 0.4% rise the November 19 week. Applications for loans to purchase a house rose 5.1% (-9.4% y/y) in the latest week after advancing 4.7% in the November 19 week and the fifth consecutive weekly increase.

The share of applications for refinancing fell to 59.4% in the week ended November 26, down from 63.1% in the prior week. The adjustable-rate mortgage (ARM) share of activity was 3.60%, up from 3.40% the week before.

The effective interest rate on a 30-year mortgage rose to 3.43% last week from 3.35% in the prior week. The effective rate on a 15-year rate mortgage rose to 2.71% in the week ended November 26 from 2.68% in the prior week. The effective rate for a 30-year Jumbo mortgage loan was 3.37% last week versus 3.35% in the November 19 week, while the rate on a 5-year adjustable-rate loan of was 2.58%, down from 3.11% the week before. The last two series date back only to January 2011, while the others begin in January 1990.

Applications for fixed-rate loans fell 7.5% (-30.9% y/y) in the week ended November 26, after a 1.5% increase in the prior week. Applications for adjustable-rate mortgages decreased 0.9% (+39.4% y/y) following a 10.0% increase the week before.

The average size of a mortgage loans was $351,400 in the week ending November 26 compared to $345,000 in the week prior. The average size of loans for purchase was $414,700 in the latest week, up from $407,200 the week before. The largest average size for loans to purchase was $418,000 back on February 19 of this year. The average size of refinanced loans rose to $308,100 in the November 26 week, down marginally from $308,600 in the prior 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) 11/26/21 11/19/21 11/12/21 Y/Y 2020 2019 2018
Total Market Index -7.2 1.8 -2.8 -29.6 63.0 32.4 -10.4
  Purchase 5.1 4.7 1.5 -9.4 11.4 6.6 2.1
  Refinancing -14.8 0.4 -5.1 -40.8 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.43 3.35 3.33 3.05

(Nov '20)

3.40 4.34 4.94
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