U.S. Mortgage Applications Dropped in the March 20 Week
Summary
- Both applications for loans to purchase and for loan refinancing dropped in the latest week.
- Double-digit basis-point rises in all interest rates.
- Average loan size declined.
Mortgage applications dropped 10.5% w/w (+25.5% y/y) in the week ending March 20, after dropping 10.9% w/w (+37.5% y/y) in the week ending March 13, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 5.4% w/w (+5.0% y/y) in the latest week after rising 0.9% w/w (11.8% y/y) in the week ending March 13. Applications for loan refinancing dropped 14.6% w/w (+52.2% y/y) in the week ending March 20, after declining 18.5% w/w (+68.8% y/y) in the week ending March 13.
The effective interest rate on a 30-year fixed-rate loan rose 14bps to 6.62% in the week ending March 20 from 6.48% in the week ending March 13 and reaching the highest level since the September 26 week when it stood at 6.64%. The rate on 15-year fixed-rate mortgages rose 19bps to 6.03% in the latest week from 5.84% in the prior week. The 30-year Jumbo rate rose 12bps to 6.61% in the week ending March 20 from 6.49% in the March 13 week. The rate on a 5-year ARM jumped 10bps to 6.00% in the latest week from 5.90% in the week ending March 13, reaching the highest level since the September 5 week when it stood at 6.01%.
The share of applications for refinancing an existing loan dropped to 49.6% of total applications in the week of March 20 from 52.3% in the March 13 week. The adjustable-rate mortgage (ARM) share of activity rose to 8.1% in the March 20 week from 8.0% in the March 13 week.
The average size of a mortgage loan declined 2.4% w/w (-0.9% y/y) to $394,500 in the week ending March 20, after declining 3.4% w/w (+0.5% y/y) to $404,000 in the week ending March 13. The average size of a purchase loan edged down 0.5% w/w (+2.3% y/y) to $453,200 in the March 20 week, after a rise of 2.0% w/w (1.0% y/y) to $455,300 in the March 13 week. The average size of a loan to refinance a mortgage declined 6.3% w/w (+1.0% y/y) to $334,900, following a drop of 10.1% w/w (+6.9% y/y) to $357,300 in the week ending March 13.
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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