U.S. Mortgage Applications Fall in the Last Week of May
Summary
- Purchase applications and loan refinancing decline.
- Effective interest rates are range-bound.
- Average loan size falls.
Mortgage applications declined 3.9% (+25.5% y/y) in the week ended May 30, following a 1.2% (+23.9% y/y) decline in the week ended May 23, marking a third consecutive weekly decline, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications to purchase a home dropped 4.4% (+17.2% y/y) following a rise of 2.7% (17.1% y/y) one week earlier. Applications to refinance a home loan fell 3.5% (+41.6% y/y) in the week ending May 30 after a 7.1% (+36.7% y/y) decline in the prior week.
The effective interest rate on a 30-year fixed rate loan dropped 6bps to 7.11% in the week ended May 30, from 7.17% in the week ended May 23. The effective rate on a 15-year fixed rate loan rose 2bps to 6.42% in the latest week from 6.40% in the week ended May 23. The rate on a 30-year jumbo loan edged down 3bps to 7.10% in the week ended May 30 from 7.13% in the prior week, while the rate on a 5-year ARM fell 9bps to 6.30% from 6.39% in the week ended May 23.
The share of applications to refinance an existing mortgage rose to 35.2% in the week ended May 30 from 34.6% in the week ended May 23. The share of loans with an adjustable rate dropped to 7.1% in the latest week from 7.5% one week earlier.
The average size of a mortgage loan declined 1.0% (+1.8% y/y) to $382,000 in the week of May 30, after falling 0.9% (+1.2% y/y) to $386,000 in the week ended May 23. The average size of a loan to purchase a home fell 0.6% (+2.0% y/y) to $438,500 in the latest week, after declining 1.1% (+0.9% y/y) to $441,200 in the week prior. The average size of a loan to refinance an outstanding mortgage declined 1.4% (+9.2% y/y) to $277,900 in the latest week, following a decline of 3.2% (+8.9% y/y) to $281,900 one week earlier.
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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