Global| Sep 24 2014U.S. Mortgage Loan Applications Decline as Interest Rates Move Higher
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index declined 4.1% last week (-25.1% y/y) following the prior week's 7.9% rise. Applications were near the lowest level of the economic recovery. [...]
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index declined 4.1% last week (-25.1% y/y) following the prior week's 7.9% rise. Applications were near the lowest level of the economic recovery. Applications to refinance an existing loan dropped 7.0% (-31.3% y/y) after the prior period's 10.3% gain. Home purchase applications slipped 0.3% (-15.9% y/y) following the prior week's 4.8% increase.
The effective interest rate on a 15-year mortgage remained unchanged at 3.63% but was higher than the 3.51% low two weeks ago. The effective rate on a 30-year fixed rate loan moved higher to 4.49%, up versus the 4.32% low late last month. The rate on a Jumbo 30-year loan increased to 4.36%. For adjustable 5-year mortgages, the effective interest rate ticked up to 3.35% but remained down versus last year's 3.74% peak.
The average mortgage loan size was steady w/w at $242,600 but remained below the $253,800 May peak. For home purchases, the average loan size held at $270,400, down versus the $280,500 high. For refinancings, it declined w/w to $220,500, off from the $232,200 high.
Applications for fixed interest rate loans declined 26.1% y/y while adjustable rate loan applications were off 11.9% y/y.
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.
| MBA Mortgage Applications (SA, 3/16/90=100) | 09/19/14 | 09/12/14 | 09/05/14 | Y/Y% | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 338.4 | 352.9 | 327.2 | -25.1 | 616.6 | 813.8 | 572.3 |
| Purchase | 168.8 | 169.3 | 161.5 | -15.9 | 197.5 | 187.8 | 182.6 |
| Refinancing | 1,297.5 | 1,395.5 | 1,265.0 | -31.3 | 3,070.0 | 4,505.0 | 2,858.4 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.63 | 3.63 | 3.51 | 3.80 (9/13) |
3.42 | 3.25 | 3.97 |
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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