U.S. Mortgage Applications Dropped in the March 13 Week
Summary
- Applications for loans to purchase edged up, while applications for loan refinancing plummeted.
- Effective interest rate on 30-year fixed loans rose 12bps to 6.48%.
- Average loan size declined.
Mortgage applications dropped 10.9% w/w (+37.5% y/y) in the week ending March 13, after rising 3.2% w/w (44.7% y/y) in the week ending March 6, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house rose 0.9% w/w (11.8% y/y) in the latest week, after a rise of 7.8% w/w (10.8% y/y) in the week ending March 6. Applications for loan refinancing dropped 18.5% w/w (+68.8% y/y) in the week ending March 13, following a small advance of 0.5% w/w (80.7% y/y) in the week ending March 6.
The effective interest rate on a 30-year fixed-rate loan rose 12bps to 6.48% in the week ending March 13 from 6.36% in the week ending March 6. The rate on 15-year fixed-rate mortgages rose 13bps to 5.84% in the latest week from 5.71% in the in the prior week. The 30-year Jumbo rate rose 14bps to 6.49% in the March 13 week from 6.35% in the March 6 week. The rate on a 5-year ARM jumped 40bps to 5.90% in the week ending March 13 from 5.50% in the week ending March 6, reaching the highest level since the January 2 week when it stood at 5.98%.
The share of applications for refinancing an existing loan dropped to 52.3% of total applications in the week of March 13 from 57.8% in the March 6 week. The adjustable-rate mortgage (ARM) share of activity edged down to 8.0% in the March 13 week from 8.9% in the March 6 week.
The average size of a mortgage loan declined 3.4% w/w (+0.5% y/y) to $404,000 in the week ending March 13, following a decline of 1.3% w/w (-0.4% y/y) to $418,100 in the week ending March 6. The average size of a purchase loan rose 2.0% w/w (1.0% y/y) to $455,300 in the latest week, after declining 1.0% w/w (-3.1% y/y) to $446,400 in the March 6 week. The average size of a loan to refinance a mortgage dropped 10.1% w/w (+6.9% y/y) to $357,300 in the week ending March 13, following a drop of 1.9% w/w (+7.2% y/y) to $397,400 in the week ending March 6.
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.
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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