U.S. Mortgage Applications Fell in Latest Week
by:Sandy Batten
|in:Economy in Brief
Summary
- Mortgage applications fell 4.7% w/w in the week ended October 3.
- Applications are on a modest uptrend but are still correcting from the outsize jump in mid-September.
- Fixed mortgage rates were mixed with the 15-year rate up a bit and the 30-year rate down slightly.
Mortgage applications fell 4.7% w/w (+16.4% y/y) in the week ended October 3 on top of a 12.7% weekly drop in the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications are on a modest uptrend but are still correcting from the 29.7% w/w surge in the week of September 12. Purchase applications slid 1.2% w/w (+14.3% y/y) following a 1.0% weekly decline in the previous week. Applications for refinancing dropped 7.7% w/w (+18.3% y/y) on top of a 20.6% weekly decline in the previous week.
Mortgage interest rates were mixed in the latest week. The effective interest rate on a 30-year fixed-rate loan fell 4bps to 6.60% in the week ending October 3 while the 15-year rate edged up 3bps to 5.96% in that week. These two interest rates have generally trended down since the beginning of this year with the 30-year rate down nearly 70bps and the 15-year rate down more than 65bps over this period. The rate on a 30-year Jumbo mortgage increased 6bps to 6.72% in the week ended October 3 while the rate on a 5-year ARM fell 15bps to 5.76%, almost reversing the 20bps jump in the previous week, and is close to levels last seen in May 2023.
The share of applications for refinancing an existing loan fell further to 53.5% in the week ended October 3 from 55.0% of total applications in the week ending September 26 and 60.2% in the week ending September 19. The adjustable-rate mortgage (ARM) share of activity rebounded to 9.5% in the October 3 week from 8.4% in the September 26 week.
The average size of a mortgage loan declined by 2.4% w/w (-1.2% y/y) to $398,100 in the week ended October 3 from $408,000 in the week ending September 26. The average size of a purchase loan fell 1.0% w/w (-3.3% y/y) to $437,500 in the latest week, its first weekly decline in four weeks, after a 0.2% w/w increase in the previous week. The average size of a refinancing loan declined 4.4% w/w (+1.6% y/y) to $363,400 in the latest week, its third consecutive weekly decline, following a 9.9% weekly drop in the previous 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.
The minutes to the latest FOMC meeting are available here.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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