Global| Oct 16 2013U.S. Mortgage Applications Downward Trend Remains In Place
by:Tom Moeller
|in:Economy in Brief
Summary
Mortgage bankers have seen their volume of business fall by roughly one-half during the last year. The Mortgage Bankers Association reported that despite the 1.7% w/w increase last week, their total mortgage market index was off 54.7% [...]
Mortgage bankers have seen their volume of business fall by roughly one-half during the last year. The Mortgage Bankers Association reported that despite the 1.7% w/w increase last week, their total mortgage market index was off 54.7% year-to-year. Applications to refinance an existing loan led the weekly gain with a 2.5% increase, but remained down by two-thirds versus October 2012. Home purchase mortgage applications slipped 0.7% last week (-5.6% y/y) and were 14.7% below the early-May peak.
The effective interest rate on a 15-year mortgage was stable last week at 3.60%, down 33 basis points from its early-September high. It remained up, however, versus the early-May low of 2.89%. The effective rate on a 30-year fixed rate loan also was stable at 4.55% last week while the rate on a Jumbo 30-year loan ticked up to 4.55%. The effective interest rate on an adjustable 5-year mortgage was stable w/w at 3.37% but remained up from its low of 2.59% at the beginning of May.
Applications for fixed interest rate loans fell by 53.8% y/y while adjustable rate loan applications declined 23.7% y/y. The average mortgage loan size slipped to $221,700. The average size loan for home purchases held steady at $264,400 last week while refinancings slipped to $199,200.
The survey covers over 75 percent 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.
Gauging the Momentum of the Labor Recovery from the Federal Reserve Bank of San Francisco can be found here.
| MBA Mortgage Applications (SA, 3/16/90=100) | 10/11/13 | 10/04/13 | 09/27/13 | Y/Y% | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 457.1 | 455.9 | 450.2 | -52.6 | 813.8 | 572.3 | 659.3 |
| Purchase | 179.0 | 188.1 | 189.4 | -10.9 | 187.8 | 182.6 | 199.8 |
| Refinancing | 2,060.8 | 1,995.4 | 1,947.4 | -62.2 | 4,505.0 | 2,858.4 | 3,348.1 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.60 | 3.60 | 3.63 | 3.01 (10/12) |
3.25 | 3.97 | 4.39 |
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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