Global| Jan 29 2020U.S. Mortgage Applications Surge as Interest Rates Ease
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its Mortgage Loan Index increased 7.2% during the week of January 24 following a 1.2% dip in the prior week. Applications were two-thirds higher than one year earlier. Applications to [...]
The Mortgage Bankers Association reported that its Mortgage Loan Index increased 7.2% during the week of January 24 following a 1.2% dip in the prior week. Applications were two-thirds higher than one year earlier. Applications to refinance a loan rebounded 7.5% (145.9% y/y) and recovered the prior week's 1.8% decline. Purchase applications rose 5.3% (17.8% y/y) after a 2.0% fall.
The contract interest rate on a 30-year fixed-rate mortgage fell last week to 3.81% from 3.87% and remained the lowest reading since November 2016. This rate is below its high of 5.17% reached early in November 2018. The contract rate on a 15-year fixed-rate loan edged lower to 3.24% from 3.25%. The contract rate on a 30-year Jumbo mortgage declined to 3.78% from 3.87%. The interest rate on an adjustable rate mortgage declined to 3.15%, the lowest level since September 2017.
The average mortgage loan size increased to $319,900 (2.2% y/y). The average loan size for purchases rose to $338,700 (8.0% y/y). The average loan size for refinancings was $307,500 (-1.4% y/y).
Applications for fixed-rate loans surged roughly three-quarters y/y while applications for adjustable rate loans gained 0.9% 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 each index 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) | 01/24/20 | 01/17/20 | 01/10/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 7.2 | -1.2 | 30.2 | 67.2 | 32.4 | -10.4 | -17.8 |
| Purchase | 5.3 | -2.0 | 15.5 | 17.8 | 6.6 | 2.1 | 5.6 |
| Refinancing | 7.5 | -1.8 | 42.7 | 145.9 | 71.1 | -24.3 | -34.0 |
| 30-Year Mortgage Contract Interest Rate (%) | 3.81 | 3.87 | 3.87 | 4.75 (Jan'19) | 4.22 | 4.80 | 4.21 |
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
