U.S. Mortgage Applications Edged Up as Interest Rates Eased Last Week
Summary
- Mortgage applications edged up in the latest week.
- Purchase applications fell while refinancing applications rose.
- The effective interest rate on 30-year fixed-rate loans eased.
Mortgage applications edged up 0.5% (-7.8% y/y) in the week ended May 10, following a rise of 2.6% (-13.5% y/y) in the week ended May 3. Home purchase loans declined 1.7% (-14.3% y/y) following a rise of 1.8% (-17.0% y/y) in the prior week. Applications to refinance a loan rose 4.7% (6.8% y/y) in the latest week after rising 4.5% (-5.8% y/y) in the week before. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The effective interest rate on a 30-year fixed-rate loan eased 11 bps to 7.26% in the week ended May 10, from 7.37% in the week ended May 3. It compared to a high of 8.12% in mid-October of last year and a low of 6.87% in the fourth week of December. The rate on 15-year fixed-rate mortgages edged up 2bps to 6.77% in the latest week from 6.75% in the week prior. The rate on 30-year Jumbo loans fell 5bps to 7.39% in the week ended May 10 from 7.44% in the week prior, and the rate on the 5-year ARM fell 4bps to 6.80% in the latest week from 6.84% the week before. These latter rates remain below the 7.31% high in the last week of October but above the recent low of 5.93% in the last week of December.
The share of applications for refinancing an existing loan rose to 32.0% in the week ended May 10 from 30.6% in the week ended May 3. That compared to a high of 39.7% in mid-December. The percentage of applications that were ARMs eased to 7.0% from 7.7%. The recent low of 5.4% was reached in early January.
The average loan size eased 1.6% (-3.0% y/y) to $379,400 in the week ended May 10, from a rise of 2.0% (-2.4% y/y) to $385,600 in the week ended May 3. The average size of a purchase loan declined 1.2% (-0.6% y/y) to $437,700 in the latest week from $443,200 in the prior week. The average loan size to refinance a mortgage was largely unchanged (-2.3% y/y) at $255,200 from $255,100 in the prior week.
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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