Global| May 22 2019U.S. Mortgage Loan Refinancings Surge as Rates Steady
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Applications Index gained 2.4% (15.4% y/y) during the week ending May 17. The rise was driven by an 8.3% jump (31.1% y/y) in applications to refinance an existing loan, [...]
The Mortgage Bankers Association reported that its total Mortgage Applications Index gained 2.4% (15.4% y/y) during the week ending May 17. The rise was driven by an 8.3% jump (31.1% y/y) in applications to refinance an existing loan, which followed a 0.5% easing during the prior week. Applications to purchase a home declined 2.0% (+4.2% y/y) last week after a 0.6% dip.
The effective interest rate on a 15-year fixed-rate mortgage held w/w at 3.88%, compared to a high of 4.71% early in November 2018. The effective rate on a 30-year fixed-rate loan eased to 4.46% and compared to a November high of 5.33%. The rate on a 30-year Jumbo mortgage was little changed at 4.34%. The rate on an adjustable 5-year mortgage declined sharply w/w to 3.70% compared to a mid-October high of 4.61%.
The average mortgage loan size increased w/w to $337,100 (11.8% y/y) but remained below the record of $381,700 in late-March. For purchases, the average loan size eased to $332,500 (3.8% y/y). The average loan refinancing size rose to $343,900 (28.6% y/y). These series date back to 1990.
Applications for fixed-rate loans rose 16.1% y/y, while adjustable rate loan applications gained 16.0% 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.
The minutes to the latest FOMC meeting can be found here https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20190501.pdf
| MBA Mortgage Applications (%, SA) | 5/17/2019 | 5/10/2019 | 5/3/2019 | Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 2.4 | -0.6 | 2.7 | 15.4 | -10.4 | -17.8 | 15.6 |
| Purchase | -2.0 | -0.6 | 4.2 | 6.7 | 2.1 | 5.6 | 13.3 |
| Refinancing | 8.3 | -0.5 | 0.8 | 31.1 | -24.3 | -34.0 | 17.3 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.88 | 3.89 | 3.91 | 4.37 (May '18) | 4.35 | 3.59 | 3.22 |
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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