Global| May 19 2021U.S. Mortgage Loan Applications Increase
by:Tom Moeller
|in:Economy in Brief
Summary
• The volume of all applications remains well below January highs. • Refinancings increase, but purchase applications decline. • Mortgage interest rates edge higher. The Mortgage Bankers Association's Loan Applications Index increased [...]
• The volume of all applications remains well below January highs.
• Refinancings increase, but purchase applications decline.
• Mortgage interest rates edge higher.
The Mortgage Bankers Association's Loan Applications Index increased 1.2% (-0.4% y/y) in the week ended May 14, following a 2.1% rise in the previous week. Applications to purchase a home fell 4.1% (+2.5% y/y) after edging 0.8% higher in the previous week. Applications for refinancing strengthened 4.0% (-1.8% y/y) after a 2.9% increase in the previous week.
The refinance share of mortgage activity rose to 63.3% of total applications in the week ended May 14, its highest level since early-March, from 61.3% in the previous week. The adjustable-rate mortgage (ARM) share of activity rose to 3.9% last week from 3.8% in the previous week, remaining well above its January 8 low of 1.6%.
The effective interest rate on a 30-year mortgage rose five basis points to 3.26%, still above its 2.95% low reached in December. The effective 15-year rate gained six basis points to 2.62%. The effective rate for a 30-year Jumbo mortgage rose to 3.39% from 3.37%. The rate on a five-year ARM rose to 2.67%, though still below its 4.61% high in October 2018.
The average mortgage loan size increased 0.2% (9.0% y/y) to $338,500 in the May 14 week, up from $337,700 the prior week. The average size of a loan to purchase a house rose 0.4% (24.4% y/y) to $411,400. The average size of a refinanced loan increased 1.3% (-1.1% y/y) to $296,100.
Applications for fixed-rate loans rose 1.1% (-1.2% y/y). Applications for adjustable-rate mortgages increased 3.8% (22.3% y/y).
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.
The minutes to the latest FOMC meeting can be found here.
| MBA Mortgage Applications (%, SA) | 05/14/21 | 05/07/21 | 04/30/21 | Y/Y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 1.2 | 2.1 | -0.9 | -0.4 | 63.0 | 32.4 | -10.4 |
| Purchase | -4.1 | 0.8 | -2.5 | 2.5 | 11.4 | 6.6 | 2.1 |
| Refinancing | 4.0 | 2.9 | 0.1 | -1.8 | 111.0 | 71.1 | -24.3 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.26 | 3.21 | 3.28 | 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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