Global| Nov 06 2013U.S. Mortgage Loan Applications Retreat; Interest Rates Remain Low
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that their total mortgage market index pulled back 7.0% last week (-41.5% y/y) and reversed the prior week's increase. Applications to refinance an existing loan retreated 7.9% and remained [...]
The Mortgage Bankers Association reported that their total mortgage market index pulled back 7.0% last week (-41.5% y/y) and reversed the prior week's increase. Applications to refinance an existing loan retreated 7.9% and remained down by one-half versus November 2012. Home purchase mortgage applications backpedaled 5.2% last week (-0.9% y/y) and were 20.7% below the early-May peak.
The effective interest rate on a 15-year mortgage again remained low last week at 3.52%, down 41 basis points from its early-September high. It still was up, however, versus the early-May low of 2.89%. The effective rate on a 30-year fixed rate loan nudged up to 4.44% last week while the rate on a Jumbo 30-year loan was 4.45%. The effective interest rate on an adjustable 5-year mortgage fell sharply w/w to 3.19% but remained up from its low of 2.59% at the beginning of May.
Applications for fixed interest rate loans fell by 43.2% y/y while adjustable rate loan applications increased 4.0% y/y. The average mortgage loan size was $226,100. The average size loan for home purchases was $262,200 last week while for refinancings it was $207,600.
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) | 11/01/13 | 10/25/13 | 10/18/13 | Y/Y% | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 449.6 | 483.7 | 454.5 | -41.5 | 813.8 | 572.3 | 659.3 |
| Purchase | 174.9 | 184.5 | 180.3 | -0.9 | 187.8 | 182.6 | 199.8 |
| Refinancing | 2,035.6 | 2,211.3 | 2,034.4 | -52.0 | 4,505.0 | 2,858.4 | 3,348.1 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.52 | 3.50 | 3.58 | 2.98 (11/12) |
3.25 | 3.97 | 4.39 |
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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