U.S. Mortgage Applications Edge Lower in Latest Week as Interest Rates Steady
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase applications increase while loan refinancing eases.
- Fixed-interest rate on 30-year loan holds at four-month low.
- Average loan size declines again.
Mortgage applications eased 0.5% (+21.6% y/y) in the week ending August 22 after falling 1.4% in the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for purchase loans rose 2.2% (24.3% y/y) last week, following a 0.1% gain in the prior week. Applications to refinance a home loan fell 3.5% (+18.6% y/y) last week, following a 3.1% decline in the week of August 15.
The effective interest rate on a 30-year fixed-rate loan was unchanged at 6.86% in the week ending August 22 for the third straight week. It remained down from a high of 7.28% in the second week of January. The rate on 15-year fixed-rate mortgages rose to 6.22% in the latest week from 6.13% in the week of August 15. Conversely, the rate on 30-year Jumbo loans eased to 6.80% last week from 6.82% one week earlier. The rate on a 5-year ARM fell to 6.19% in the week of August 22 after rising to 6.24% in the prior week.
The share of applications for refinancing an existing loan fell to 45.3% of total applications in the week ending August 22 after easing to 46.1% in the prior week. The share hit a low of 34.6% in the fourth week of May. The adjustable-rate mortgage (ARM) share of activity edged lower to 8.40% in the latest week after falling to 8.60% in the week of August 15.
The average size of a mortgage loan fell 1.2% (+2.9% y/y) to $383,000 in the week of August 22, following a 2.7% decline in the prior week. The average size of a purchase loan rose 1.0% (1.5% y/y) to $433,400 in the latest week after rising 0.5% in the week ending August 15. The average size of a loan to refinance a mortgage fell 5.2% (+4.2% y/y) to $322,200 last week, after falling 7.3% to $339,800 in the prior week. It was increased from a low of $277,900 in the last week of May.
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.
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