Global| Nov 11 2020U.S. Mortgage Applications Ease as Purchase Applications Decline Again
by:Tom Moeller
|in:Economy in Brief
Summary
• Home purchase applications fall sharply for second straight week. • Financing rates plumb new lows. The Mortgage Bankers Association Mortgage Loan Applications Index eased 0.5% (+46.7% y/y) in the week ended November 6 after [...]
• Home purchase applications fall sharply for second straight week.
• Financing rates plumb new lows.
The Mortgage Bankers Association Mortgage Loan Applications Index eased 0.5% (+46.7% y/y) in the week ended November 6 after increasing 3.8% the prior week. Purchase applications fell 2.6% (+15.8% y/y) after reaching a peak in the third week of September. The latest level was the lowest point since May 2020. Applications to refinance a loan edged 0.6% higher (67.3% y/y) following two weeks of strong gains. The refinancing share of total applications rose to 70.0%, the highest point since early-May. Adjustable rate mortgages' share of the total number of applications was fairly steady at 2.0%.
Interest rates were mixed this past week as 30-year fixed rate mortgage rates fell to 3.08%, a record low. The rate on 15-year loans of 2.64% was fairly steady at the prior week's record low. The effective rate for a Jumbo mortgage fell five basis points to 3.22%, another record low. (This series began in January 2011). The rate on the 5-year adjustable rate mortgage rose modestly to 2.95% after falling from 3.28% during the prior week.
The average mortgage loan size fell 0.8% w/w to $319,100 (+1.0% y/y). The average size of a purchase loan declined 1.3% to $368,100 (+9.9 y/y) in the week ended November 6 from the record high of $373,000 in the prior week. The average loan size to refinance was little changed at $298,200 (-2.0% y/y).
Applications for fixed-rate loans eased 0.4% w/w (+51.2% y/y) and applications for adjustable-rate mortgages fell 4.9% w/w (-40.2% 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) | 11/06/20 | 10/30/20 | 10/23/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -0.5 | 3.8 | 1.7 | 46.7 | 32.4 | -10.4 | -17.8 |
| Purchase | -2.6 | -1.3 | 0.2 | 15.8 | 6.6 | 2.1 | 5.6 |
| Refinancing | 0.6 | 6.4 | 2.5 | 67.3 | 71.1 | -24.3 | -34.0 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.08 | 3.12 | 3.10 | 4.08
(Nov '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.
More Economy in Brief
