U.S. Mortgage Applications Dropped in the Week of January 23
Summary
- Purchase and refinancing loan applications declined in the latest week.
- Effective interest rate on 30-year fixed loans rose 8bps to 6.40%.
- Average loan size declined.
Mortgage applications dropped 8.5% w/w (+65.1% y/y) in the week ending January 23, following two consecutive weeks of double-digit rises of 14.1% w/w in the week ending January 16 and of 28.5% w/w in the week ending January 9, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house edged down 0.4% w/w (+19.0% y/y) in the week ending January 23, after rising 5.1% w/w (19.1% y/y) in the week ending January 16. Applications for loan refinancing declined 15.7% w/w (+155.7% y/y) after a jump of 20.4% w/w in the January 16 week and a surge of 40.1% w/w in the January 9 week.
The effective interest rate on a 30-year fixed-rate loan rose 8bps to 6.40% in the week ending January 23 from 6.32% in the week ending January 16. The rate on 15-year fixed-rate mortgages also rose 8bps to 5.79% in the latest week from 5.71% in the prior week. The 30-year Jumbo rate fell 4bps to 6.46% in the January 23 week from 6.50% in the January 16 week. The rate on a 5-year ARM jumped 20bps to 5.85% in the latest week from 5.65% in the week ending January 16.
The share of applications for refinancing an existing loan declined to 56.2% of total applications in the January 23 week from 61.9% in the January 16 week. The adjustable-rate mortgage (ARM) share of activity rose to 7.6% in the week ending January 23 from 7.1% in the week ending January 16.
The average size of a mortgage loan declined 2.9% w/w (+5.5% y/y) to $403,300 in the week ending January 23, after rising 2.9% w/w (11.1% y/y) to $415,300 in the week ending January 16. The average size of a purchase loan rose 0.8% w/w (+0.9% y/y) to $440,600 in the latest week, following a decline of 0.7% w/w (+1.3% y/y) to $437,100 in the week ending January 16. The average size of a loan to refinance a mortgage dropped 6.9% w/w (+28.8% y/y) to $374,200 in the week ending January 23, following a rise of 6.0% w/w (39.4% y/y) to $401,900 in the week ending January 16.
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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