U.S. Mortgage Applications Decline Last Week as Interest Rates Jump
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase applications & loan refinancing decline.
- Effective interest rates increase.
- Average loan size falls.
Mortgage applications declined 5.1% (+18.1% y/y) in the week ended May 16, after rising 1.1% in the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications to purchase a home fell 5.2% (+12.7% y/y) after rising 2.3% one week earlier. Applications to refinance a home loan weakened 5.0% (+27.1% y/y) last week after easing 0.4% in the prior week.
The effective interest rate on a 30-year fixed rate loan rose to 7.12% in the week ended May 16 after falling to 7.06% in the prior week. The latest rate was the highest since the second week of February. The effective rate on a 15-year fixed rate loan rose to 6.39% in the week ended May 16 following the prior week’s fall to 6.27%. The rate on a 30-year jumbo loan of 7.15% compared to 7.0% in the prior week, while the rate on a 5-year ARM fell to 6.29% in the week ended May 16 after rising to 6.36% in the prior week.
The share of applications to refinance an existing mortgage edged higher to 36.6% in the week ended May 16 from 36.4% in the prior week. The share of loans with an adjustable rate eased to 7.1% last week after falling to 7.4% one week earlier.
The average size of a mortgage loan declined 2.0% (+1.4% y/y) to $389,400 in the week ended May 16, after slipping 0.7% to $397,300 in the prior week. The average size of a loan to purchase a home eased 0.7% (+0.5% y/y) to $446,200 in the latest week after rising 1.1% to $449,300 in the week prior. The average size of a loan to refinance an outstanding mortgage declined 5.0% (+9.0% y/y) last week to $291,100 after declining 5.8% to $306,500 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.
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.
