U.S. Mortgage Applications Got Support from Purchase Applications

Mortgage applications edged up 0.3% w/w (-15.4% y/y) in the week ending November 24, following the 3.0% increase (-16.3% y/y) in the week ending November 17, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The latest reading was the fourth successive weekly gain. Applications for loans to purchase a house rose 4.7% (-19.9% y/y) in the latest week, after the 3.9% (-20.6% y/y) rise the prior week, also the fourth straight w/w rise. In contrast, applications for loan refinancing plummeted 8.9% (+0.7% y/y) in the week ending November 24, following a rise of 1.6% (-3.7% y/y) the prior week.

Mortgage interest rates largely fell further, providing some support for mortgage applications. The effective interest rate on a 30-year fixed-rate loan edged down 4bps to 7.55% in the week ending November 24, from 7.59% in the November 17 week, and down from 7.80% in the November 10 week. The rate on 15-year fixed-rate mortgages fell 7bps to 7.01% in the latest week, from 7.08% in the November 17 week and from a high of 7.44% in the October 27 week. However, the rate on a 30-year Jumbo loan inched up 3bps to 7.72% from 7.69% in the prior week, while the rate on a 5-year ARM loan dropped 19bps to 6.87% in the week ending November 24 from 7.06% in the November 17 week.

The share of applications for refinancing an existing loan declined to 30.6% in the week ending November 24 from 32.4% in the November 17 week. The adjustable-rate mortgage (ARM) share of activity fell to 8.1% from 8.3% in the prior week, the fourth successive w/w fall.

The average size of a mortgage loan rose 3.2% (-1.4% y/y) to $362,300 in the week ending November 24 following the 1.3% w/w (-3.4% y/y) decline to $351,000 in the week prior. The average size of a purchase loan rose 1.9% (2.8% y/y) to $411,100 the week ending November 24 after a decrease of 0.7% (+0.9% y/y) to $403,600 in the November 17 week. The average size of a loan to refinance a mortgage jumped 4.4% (-8.5% y/y) to $251,800 in the latest week, after a drop of 2.3% (-10.9% y/y) to $241,200 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.