Global| Dec 21 2016U.S. Mortgage Loan Applications Trend Lower as Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 2.5% last week (-9.5% y/y), but made up just part of the prior week's 4.0% decline. Since their peak early in July, applications have [...]
The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 2.5% last week (-9.5% y/y), but made up just part of the prior week's 4.0% decline. Since their peak early in July, applications have fallen by roughly one-third. Refinancing applications gained 3.0% w/w, yet were off by one-half versus the level early in July. Purchase applications increased 2.7% (0.9% y/y), but were 6.8% below the high early in June.
The effective interest rate on a 15-year mortgage rose to 3.73%, up from the July low of 2.97%. The effective rate on a 30-year fixed-rate loan rose to 4.52%, up from the 3.70% low in early-July. The rate on a Jumbo 30-year loan increased to 4.43%. For adjustable 5-year mortgages, the effective interest rate of 3.54% was higher than 2.87% roughly six months ago.
The average mortgage loan size increased to $273,100, up 0.8% y/y. For purchases, it increased to $312,000 (3.5% y/y); for refinancings, it was little changed at $244,900 (-3.2% y/y).
Applications for fixed interest rate loans fell 9.9% y/y, while adjustable-rate loan applications declined 3.0% 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) | 12/16/16 | 11/09/16 | 12/02/16 | Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 2.5 | -4.0 | -0.7 | -9.5 | 17.9 | -41.4 | -24.2 |
| Purchase | 2.7 | -3.3 | 0.4 | 0.9 | 15.5 | -12.9 | 5.2 |
| Refinancing | 3.0 | -3.6 | -0.7 | -17.8 | 19.7 | -52.8 | -31.9 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.73 | 3.62 | 3.62 | 3.50 (Dec. '15) | 3.37 | 3.54 | 3.42 |
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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