Global| Jul 17 2019U.S. Mortgage Loan Applications Decline as Interest Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Applications Index fell 1.1% (+36.0% y/y) during the week ending July 12 and added to the prior week's 2.4% decline. The fall reflected a 3.8% drop (+6.9% y/y) in [...]
The Mortgage Bankers Association reported that its total Mortgage Applications Index fell 1.1% (+36.0% y/y) during the week ending July 12 and added to the prior week's 2.4% decline. The fall reflected a 3.8% drop (+6.9% y/y) in applications to purchase a home after rising 2.3% in the prior week. Refinance applications rose 1.5% (86.5% y/y) after 6.5% decline.
The effective interest rate, which includes points, on a 15-year fixed-rate mortgage rose w/w to 3.56%. That compared to a high of 4.71% early in November 2018. The effective rate on a 30-year fixed-rate loan also rose w/w to 4.23% but remained below the November high of 5.33%. The effective rate on a 30-year Jumbo mortgage gained slightly w/w to 4.13%. It remained below the October peak of 5.09%. The rate on an adjustable 5-year mortgage was essentially unchanged at 3.68%. It's recent high was 4.52% averaged last October.
The average mortgage loan size declined w/w to $323,400 (+13.7% y/y) and remained below the record of $381,700 in late-March. For purchases, the average loan size was fairly stable at $323,000 (6.1% y/y). The average loan size for refinancings fell to $322,800 (+29.9% y/y). These series date back to 1990.
Applications for fixed-rate loans rose by more than one-third y/y, while adjustable rate loan applications gained 10.0% 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) | 7/12/2019 | 7/5/2019 | 6/28/2019 | Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -1.1 | -2.4 | -0.1 | 36.0 | -10.4 | -17.8 | 15.6 |
| Purchase | -3.8 | 2.3 | 1.1 | 6.9 | 2.1 | 5.6 | 13.3 |
| Refinancing | 1.5 | -6.5 | -1.2 | 86.5 | -24.3 | -34.0 | 17.3 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.56 | 3.50 | 3.50 | 4.35 (July '18) | 4.35 | 3.59 | 3.22 |
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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