U.S. Mortgage Applications & Interest Rates Edge Lower in Latest Week
by:Tom Moeller
|in:Economy in Brief
Summary
- Mortgage applications decline for fourth straight week.
- Purchase applications fall sharply as refinancing increases.
- Mortgage interest rates fall.
Mortgage applications dipped 0.3% (+47.2% y/y) in the week ended October 17 following a 1.8% decline during the previous week. It was the smallest of four consecutive weekly declines, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Purchase applications fell 5.2% (+19.8% y/y) following a 2.7% decline in the previous week. Applications for refinancing rose 4.0% (80.6% y/y) in the October 17 week after declining 1.0% in the previous week.
Mortgage interest rates edged lower last week. The effective interest rate on a 30-year fixed-rate loan eased to 6.54% in the week ending October 17 after holding steady at 6.60% while the 15-year rate slipped to 5.91% after falling to 5.94%. The rate on a 30-year Jumbo mortgage declined to 6.50% from 6.62% while the rate on a 5-year ARM fell to 5.78% from 5.85%.
The share of applications for refinancing an existing loan rose to 55.9% after edging up to 53.6% in the previous week. The adjustable-rate mortgage (ARM) share of activity rebounded to 10.8% in the week of October 17, the highest share in five weeks.
The average size of a mortgage loan rose 3.6% (8.2% y/y) to $414,700 in the week ended October 17 after rising 0.5% in the prior week. It remained below the high of $452,000 in the week of September 12. The average size of a purchase loan rose 1.0% (-1.7% y/y) to $438,900 after two consecutive weekly declines. The average size of a refinanced loan increased 6.8% (28.3% y/y) to $395,500 in the week ended October 17 after rising 1.9% one week earlier.
The Mortgage Bankers Association Survey covers 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 SURVEYS database.
The Price of Housing in the United States, 1890-2006 from the Federal Reserve Bank of Philadelphia is available here
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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