U.S. Mortgage Applications Continue to Decline
Summary
- Mortgage applications posted their third consecutive weekly decline in the week ended May 26.
- The effective rates on fixed loans rose sharply in the latest week.
- The average loan size declined in the latest week.
Mortgage loan applications fell 3.7% (-36.0% y/y) in the week ended May 26, after declining 4.6% (-35.0% y/y) in the week ended May 19. Applications were at their lowest level since late February. These data come from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Applications for loans to purchase a home fell 2.5% (-31.1% y/y) in the latest week following a 4.3% (-29.8% y/y) decline in the prior week. Applications to refinance an existing loan dropped 6.9% (-45.1% y/y) last week, after a 5.4% (-44.3% y/y) decline in the prior week.
The share of loans to refinance an existing mortgage in the week ended May 26 fell to 26.7% after holding steady at 27.4% in the prior two weeks. The share of loans with an adjustable rate edged up slightly to 6.8% in the week of May 26 from 6.7% the week before.
The effective interest rate on a 30-year fixed rate loan rose to 7.15% in the week ended May 26, up from 6.88% the week before, and reaching a level not seen since early November 2022. The rate on a 15-year fixed-rate mortgage rose to 6.62% last week up from 6.33% the prior week, also reaching its highest level since early November. The rate on a 30-year Jumbo loan reached 7.01% in the week of May 26, up from 6.74% the prior week and the highest level since the series inception in 2011. For a 5-year ARM loan, the effective rate declined to 5.56% in the latest week from 6.17% the week prior.
The average size of a mortgage loan edged down 0.7% (+1.4% y/y) to $391,000 in the week ended May 26, from $393,600 in the prior week. The average size of a purchase loan declined 0.6% (+1.4% y/y) to $439,400 in the latest week, from $442,000. Refinance loan average size declined 2.5% (-8.4% y/y) to $258,400 in the week of May 26 from $265,100 in the week of May 19.
The Mortgage Bankers 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.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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