Global| Feb 26 2014U.S. Mortgage Loan Applications Follow Home Purchases Lower
by:Tom Moeller
|in:Economy in Brief
Summary
A softer housing market has lessened the workload of mortgage bankers. The Mortgage Bankers Association reported that their total mortgage market index declined 8.5% last week (-53.7% y/y), the third consecutive week of sharp decline. [...]
A softer housing market has lessened the workload of mortgage bankers. The Mortgage Bankers Association reported that their total mortgage market index declined 8.5% last week (-53.7% y/y), the third consecutive week of sharp decline. Applications to purchase a home fell 3.5% (-14.9% y/y), the fourth straight weekly shortfall. Applications to refinance a loan were off 11.4% (-64.5% y/y), the second week of meaningful decline.
The effective interest rate on a 15-year mortgage held last week at 3.63%, up from 3.52% early in November. That' also higher than the 2.89% low early in May of 2013. The effective rate on a 30-year fixed rate loan ticked up to 4.62% last week while the rate on a Jumbo 30-year loan was roughly stable at 4.51%. The effective interest rate on an adjustable 5-year mortgage at 3.29% remained up from its low of 2.59% at the beginning of May last year.
Applications for fixed interest rate loans fell 55.5% y/y while adjustable rate loan applications fell 12.4% y/y. The average mortgage loan size retreated to $227,700. The average loan size for home purchases fell to $266,600 last week and for refinancings it declined to $199,900.
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) | 02/21/14 | 02/14/14 | 02/07/14 | Y/Y% | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 348.5 | 380.9 | 397.2 | -53.7 | 616.6 | 813.8 | 572.3 |
| Purchase | 155.0 | 160.7 | 171.5 | -14.9 | 197.5 | 187.8 | 182.6 |
| Refinancing | 1,457.2 | 1,644.5 | 1,690 | -64.5 | 3,070.0 | 4,505.0 | 2,858.4 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.63 | 3.63 | 3.55 | 3.10 (2/13) |
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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