U.S. Mortgage Applications Edged Up in the Week of January 2
Summary
- Purchase applications dropped while refinancing loan applications rose in the latest week.
- Effective interest rate on 30-year fixed loans fell to 6.42%.
- Average loan size declined.
Mortgage applications rose 0.3% w/w (+60.8% y/y) in the week of January 2, after declining 10.0% w/w (+54.3% y/y) in the week of December 26 and dropping 5.0% w/w (+49.8% y/y) in the week of December 19, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 6.2% w/w (+24.7% y/y) in the week ending January 2, the fifth consecutive weekly decline, after edging down 0.1% w/w (+24.2% y/y) in the December 26 week. Applications for loan refinancing rose 7.4% w/w (133.6% y/y) in the January 2 week, after dropping 19.6% w/w (+120.7% y/y) in the week ending December 26.
The effective interest rate on a 30-year fixed-rate loan fell 8bps to 6.42% in the week ending January 2 from 6.50% in the week ending December 26. The rate on 15-year fixed-rate mortgages dropped 5bps to 5.80% in the latest week from 5.85% in the prior week. The 30-year Jumbo rate dropped 10bps to 6.45% in the January 2 week from 6.55% in the December 26 week. It had been 6.63% in the December 19 week. The rate on a 5-year ARM jumped 28bps to 5.98% in the latest week after dropping 26bps to 5.70% in the December 26 week.
The share of applications for refinancing an existing loan rose to 56.6% of total applications in the January 2 week from 53.8% in the week ending December 26. That share was 59.1% in the December 19 week. The adjustable-rate mortgage (ARM) share of activity fell to 6.3% in the week ending January 2, down from 7.6% in the December 26 week and 8.1% in the December 19 week.
The average size of a mortgage loan dropped 4.5% w/w (+5.6% y/y) to $379,800 in the week ending January 2, following a 0.5% w/w (+8.2% y/y) decline to $397,900 in the week ending December 26. The average size of a purchase loan declined 4.2% w/w (-1.4% y/y) to $408,700 after edging down 0.4% w/w (+0.9% y/y) to $426,800 in the December 26 week. The average size of a loan to refinance a mortgage declined 4.1% w/w (+27.8% y/y) to $357,700, following a decline of 1.7% w/w (+31.9% y/y) to $373,100 in the December 26 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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