Global| Mar 24 2021U.S. Mortgage Applications Continue to Decline, Led by Refinancings
by:Tom Moeller
|in:Economy in Brief
Summary
• Refinancing applications decline as mortgage interestrates rise. • Purchase applications rise further. The Mortgage Bankers Association Mortgage Loan Applications Index declined 2.5% (-0.8% y/y) in the week ended March 19, the sixth [...]
• Refinancing applications decline as mortgage interestrates rise.
• Purchase applications rise further.
The Mortgage Bankers Association Mortgage Loan Applications Index declined 2.5% (-0.8% y/y) in the week ended March 19, the sixth decline in seven weeks. Applications for refinancing fell 5.1 % (-12.7% y/y), falling steadily from their late-January peak. Applications to purchase a home rose 2.6% (26.2% y/y), up for the fourth straight week.
The refinance share of mortgage activity fell to 60.9% of total applications from a peak of 73.1% during all of December. The adjustable rate mortgage (ARM) share of activity rose to 3.2%, up from 1.9% in November and December.
Mortgage interest rates continued to rise last week. The effective interest rate on a 30-year mortgage of 3.48% compared to 3.40% in the prior week. The rate was higher than the low of 2.97% during all of December and stood at its highest level since May of last year. The effective 15-year rate of 2.82% compared to 2.76% in the prior week and an early-January low of 2.47%. The effective rate for a 30-year Jumbo mortgage rose to 3.53%. The rate on a five-year ARM rose slightly to 2.95% from 2.92% in the prior week. It was below the February average of 3.04%.
The average mortgage loan size rose 1.8% (-1.2% y/y) to $333,000 in the week ended March 19. The average size of a purchase loan edged 0.8% higher (21.8% y/y) to $409,300 and remained below the record $418,000 in the third week of February. The average size of a refinanced loan rose 1.3% (-15.8% y/y) to $284,200.
Applications for fixed-rate loans fell 2.9% (1.6% y/y) last week. Applications for adjustable-rate mortgages rose 12.4% (-48.6% y/y) last week after falling 10.9% 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) | 03/19/21 | 03/12/21 | 03/05/21 | Y/Y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -2.5 | -2.2 | -1.3 | -0.8 | 63.0 | 32.4 | -10.4 |
| Purchase | 2.6 | 1.8 | 7.2 | 26.2 | 11.4 | 6.6 | 2.1 |
| Refinancing | -5.1 | -4.2 | -5.0 | -12.7 | 111.0 | 71.1 | -24.3 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.48 | 3.40 | 3.38 | 3.73
(Mar '20) |
3.40 | 4.34 | 4.94 |
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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