Global| Sep 23 2020Mortgage Loan Applications Surge As Refinancing Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
• Applications bounce back after prior week's decline. • Mortgage rates edge higher. The Mortgage Bankers Association Mortgage Loan Applications Index increased 6.8% (57.8% y/y) in the week ended September 18 after declines in four of [...]
• Applications bounce back after prior week's decline.
• Mortgage rates edge higher.
The Mortgage Bankers Association Mortgage Loan Applications Index increased 6.8% (57.8% y/y) in the week ended September 18 after declines in four of the prior five weeks.
Applications to refinance an existing loan rose 8.8% (85.7% y/y) following a 3.7% decline. Purchase applications improved 3.4% (25.1% y/y) after easing 0.5% in the previous week. The percentage of loans for refinancing an existing mortgage rose slightly to 64.3%.
The effective rate on a 30-year fixed rate interest rate increased to 3.24% from 3.16%, its highest level since late-July. The rate on 15-year loans rose six basis points to 2.76%. The effective rate for a Jumbo mortgage loan eased by one basis point to 3.47%, a record low for this series which began in 2011. The rate on the 5-year adjustable rate mortgage edged higher to 3.42%, the highest rate since April 10.
The average mortgage loan size eased w/w to $324,000. The average size of a purchase loan increased slightly to $371,000, a record high for this survey. The average loan size to refinance fell to $297,900.
Applications for fixed-rate loans rose 6.8% (62.6% y/y) and applications for adjustable rate mortgages rose 4.5% (-31.2% y/y).
The 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) | 09/18/20 | 09/11/20 | 09/04/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 6.8 | -2.5 | 2.9 | 57.8 | 32.4 | -10.4 | -17.8 |
| Purchase | 3.4 | -0.5 | 2.6 | 25.1 | 6.6 | 2.1 | 5.6 |
| Refinancing | 8.8 | -3.7 | 3.0 | 85.7 | 71.1 | -24.3 | -34.0 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.24 | 3.16 | 3.17 | 4.08 (Sep '19) |
4.34 | 4.94 | 4.32 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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