U.S. Mortgage Applications Decline Further; Rates Ease
- Mortgage applications post their fourth consecutive weekly decline.
- Interest rates slip following sharp increase.
- Average loan size declines.
Mortgage loan applications fell 1.4% (-32.5% y/y) in the week ended June 2 after declining 3.7% in the prior week. Applications remained at their lowest level since late February, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Applications for loans to purchase a home fell 1.7% (-27.1% y/y) following a 2.5% decline in the prior week. It was the fourth consecutive weekly shortfall. Applications to refinance an existing loan eased 0.7% (-42.3% y/y) after weakening 6.9% in the prior week. It also was the fourth straight weekly drop.
The share of loans to refinance an existing mortgage last week rose to 27.3% and recovered the prior week’s decline. The share of loans with an adjustable rate held steady at 6.8%.
The effective interest rate on a 30-year fixed rate loan fell to 7.00% in the week ended June 2 after increasing to a six-month high of 7.15% in the previous week. The rate on a 15-year fixed-rate mortgage declined to 6.40% last week from 6.62% in the prior week. The rate on a 30-year Jumbo loan fell to 6.90% from 7.01% in the prior week. For a 5-year ARM loan, the effective rate increased to a record 6.29% from 5.56% in the week prior.
The average size of a mortgage loan fell 2.5% (+0.3% y/y) to $381,200 in the week ended June 2, from $391,000 in the prior week. The average size of a purchase loan declined 2.2% (+0.7% y/y) to $429,700 in the latest week, from $439,400. The average size of a refinanced loan declined 2.6% (-10.6% y/y) to $251,800 last week from $258,400 in the prior week.
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.
Tom MoellerAuthorMore 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.