Global| Jul 08 2020U.S. Mortgage Loan Applications Increase as Home Purchase Apps Surge
by:Tom Moeller
|in:Economy in Brief
Summary
• 15-year fixed rate mortgage eased to record low. The Mortgage Bankers Association reported that its total Mortgage Applications Index increased 2.2% (71.1% y/y) during the week ending July 3 after falling for two straight weeks. [...]
• 15-year fixed rate mortgage eased to record low.
The Mortgage Bankers Association reported that its total Mortgage Applications Index increased 2.2% (71.1% y/y) during the week ending July 3 after falling for two straight weeks. Applications to purchase a home rebounded 5.3% (33.2% y/y) and recouped two consecutive weeks of decline. Refinance activity edged 0.4% higher (110.9% y/y), also following two weeks of sharp decline.
The effective interest rate on a 15-year fixed-rate mortgage eased to a record low of 2.85%. Thirty-year fixed rates also fell to a record low of 3.36%. Thirty-year jumbo rates eased to 3.62%. Five-year adjustable rates decreased to 3.01%, the lowest level since September 2016.
The average mortgage loan size increased w/w to $330,100 (0.8% y/y), but remained down versus the early-March high of $367,900. For purchases, the average loan size increased to $365,700 (12.8% y/y) while refinancing loan size increased to $306,500 (-7.3% y/y).
With interest rates low, applications for fixed-rate loans increased 56.5% y/y while adjustable-rate mortgage loans declined 2.6% 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) | 07/03/20 | 06/26/20 | 06/19/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 2.2 | -1.8 | -8.7 | 71.1 | 32.4 | -10.4 | -17.8 |
| Purchase | 5.3 | -1.3 | -3.0 | 33.2 | 6.6 | 2.1 | 5.6 |
| Refinancing | 0.4 | -2.2 | -11.7 | 110.9 | 71.1 | -24.3 | -34.0 |
| 15-Year Effective Mortgage Interest Rate (%) | 2.85 | 2.90 | 2.89 |
3.54 |
3.71 | 4.35 | 3.59 |
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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