Global| Jun 02 2021U.S. Mortgage Loan Applications Fall Again
by:Tom Moeller
|in:Economy in Brief
Summary
• Applications are down one-third so far this year. • Both purchase & refinancing applications dropped last week. • Mortgage interest rates are little changed. The Mortgage Bankers Association's Loan Applications Index fell 4.0% [...]
• Applications are down one-third so far this year.
• Both purchase & refinancing applications dropped last week.
• Mortgage interest rates are little changed.
The Mortgage Bankers Association's Loan Applications Index fell 4.0% (+3.0% y/y) in the week ended May 28, following a 4.2% decline in the previous week. Applications for refinancing weakened 4.6% (+6.0% y/y) after falling 7.2% in the previous week. Applications to purchase a home were off 3.1% (-1.6% y/y) after rising 1.7% in the previous week.
The refinance share of mortgage activity eased to 61.3% of total applications in the week ended May 28, from 61.4% in the previous week. The adjustable-rate mortgage (ARM) share of activity fell sharply w/w to 3.7% from 4.0% in the previous week. It was the lowest share in five weeks, but remained well above the January 8 low of 1.6%.
The effective interest rate on a 30-year mortgage rose one basis point to 3.29% and remained above its 2.95% low reached in December. The effective 15-year rate rose three basis points to 2.63%. The effective rate for a 30-year Jumbo mortgage increased six basis points to 3.45%. The rate on a five-year ARM fell to 2.65% from 2.92% and remained below its 4.61% high in October 2018.
The average mortgage loan size eased 0.4% (+5.7% y/y) to $337,200 in the May 28 week. The average size of a loan to purchase a house slipped 0.3% (+19.1% y/y) to $408,300. The average size of a refinanced loan declined 0.4% (-3.4% y/y) to $292,400.
Applications for fixed-rate loans fell 3.7% (+2.7% y/y) after declining 4.3% in the prior week. Applications for adjustable-rate mortgages dropped 11.7% (+9.0% y/y) after falling 1.5%.
This 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) | 05/28/21 | 05/21/21 | 05/14/21 | Y/Y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -4.0 | -4.2 | 1.2 | 3.0 | 63.0 | 32.4 | -10.4 |
| Purchase | -3.1 | 1.7 | -4.1 | -1.6 | 11.4 | 6.6 | 2.1 |
| Refinancing | -4.6 | -7.2 | 4.0 | 6.0 | 111.0 | 71.1 | -24.3 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.29 | 3.28 | 3.26 | 3.5
(May '20) |
3.40 | 4.34 | 4.94 |
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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