Global| Nov 18 2015U.S. Mortgage Loan Applications Move Sideways as Interest Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
The recent rise in the cost of mortgage financing has muted the number loan applications. The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 6.2% last week (10.7% y/y). The rise made up the [...]
The recent rise in the cost of mortgage financing has muted the number loan applications. The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 6.2% last week (10.7% y/y). The rise made up the prior week's decline and left this month's average near the August level. Last week's gain was paced by an 11.9% rise (18.6% y/y) in purchase applications which similarly have moved sideways since the summer. Refinancing applications rose 2.3% (5.6% y/y) but also remained steady with August.
The effective interest rate on a 15-year mortgage rose to 3.51%, up off the October low of 3.28% and even with July. The effective rate on a 30-year fixed rate loan rose w/w to 4.31% but the rate on a Jumbo 30-year loan held at 4.14%. For adjustable 5-year mortgages, the effective interest rate of 3.34% compared to 3.07% four weeks earlier.
The average mortgage loan size declined to $266,900 (+6.8% y/y. For purchases, it increased to $301,200 (7.8% y/y) but for refinancings, it fell sharply to $242,700 (+5.0% y/y).
Applications for fixed interest rate loans increased 11.6% y/y, while adjustable rate loan applications improved 1.0% y/y.
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) | 11/13/15 | 11/06/15 | 10/31/15 | Y/Y % | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 433.9 | 408.7 | 414.2 | 10.7 | 361.5 | 616.6 | 813.8 |
| Purchase | 212.8 | 190.1 | 190.0 | 18.6 | 172.1 | 197.5 | 187.8 |
| Refinancing | 1,694.8 | 1,656.2 | 1,692.9 | 5.6 | 1,449.8 | 3,070.0 | 4,505.0 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.51 | 3.44 | 3.33 | 3.42 (11/14) |
3.54 | 3.42 | 3.25 |
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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