U.S. Mortgage Applications Decrease Modestly and So Do Rates
Summary
- Applications for loans to purchase rose...
- While applications to refinance fell 12.9%.
- Mortgage rates declined again on fixed-rate loans, and also decreased for ARMs.
Mortgage applications fell modestly in the week ended November 25, down 0.8% (-65.6% y/y) after rising 2.2% the week before, according to the Mortgage Bankers Association survey. Applications for loans to purchase a home did rise 3.8% (-41.7% y/y) after the prior week’s 2.8% increase. But applications for refinancing a loan dropped 12.9% (-85.9% y/y) in the November 25 week after increasing 1.8% in the previous week.
The share of applications for refinancing an existing loan thus also fell to 26.1% in the November 25 week, down from 28.4% the week before. These latest weeks’ shares compare with 65% during the last weeks of 2021. The percentage of loan applications that are ARM ticked up to 9.0% in the latest week from 8.8% the week before.
The effective rate on a 30-year fixed-rate loan declined 19 basis points to 6.68% in the November 25 week from 6.87% in the week before; the latest is still up significantly from 3.39% in December of last year. The rate on 15-year fixed-rate mortgages was 6.19%, down from 6.25% the week before. The rate on 30-year Jumbo loans was unchanged at 6.52% while that on a 5-year ARM fell in the latest week to 5.81% from 6.05%.
The average loan size increased to $367,400 in the November 25 week from $363,300 in the November 18 week. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan was $399,900 (-3.6% y/y) in the latest week, down from $400,100 the week before while the average size of a loan to refinance a mortgage increased to $275,100 (-10.7% y/y) from $270,700.
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.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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