U.S. Mortgage Applications Jump in the Week of December 5
Summary
- Purchase applications fell 2.4% w/w; refinancing loan applications soared 14.3% w/w.
- Effective interest rate on 30-year fixed loans largely unchanged at 6.50%.
- Average loan size fell moderately.
Mortgage applications jumped 4.8% w/w (45.4% y/y) in the week of December 5, following a decline of 1.4% w/w (+46.3% y/y) in the week ending November 28, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 2.4% w/w (+17.2% y/y) in the latest week, after rising 2.5% (15.2% y/y) in the November 28 week and jumping 7.6% in the November 21 week. Applications for loan refinancing soared 14.3% (87.8% y/y) in the week ended December 5, after retrenching 4.4% (+109.0% y/y) in the November 28 week. The December 5 jump breaks the fifth straight w/w decline.
The effective interest rate on a 30-year fixed-rate loan rose 1bp to 6.50% in the week ending December 5 from 6.49% in the week ending November 28, and after rising to 6.58% in the week ending November 21. The rate on 15-year fixed-rate mortgages fell 2bps to 5.87% in the latest week from 5.89% in the November 28 week. The rate on 30-year jumbo loans rose 5bps to 6.57% in the week of December 5 from 6.52% in the prior week. The rate on a 5-year ARM jumped 32bps to 5.80% in the December 5 week from 5.48% in the November 28 week.
The share of applications for refinancing an existing loan rose to 58.2% of total applications in the December 5 week from 53.0% in the week ending November 28. The adjustable-rate mortgage (ARM) share of activity fell to 7.0% in the latest week from 8.0% in the November 28 week.
The average size of a mortgage loan fell 0.7% (+7.1% y/y) to $394,200 in the December 5 week, following a rise of 0.4% w/w (5.2% y/y) to $397,100 in the November 28 week. The average size of a purchase loan fell 0.4% (1.3% y/y) to $421,700 in the latest week, after a 0.9% decline to $423,300 in the November 28 week. The average size of a loan to refinance a mortgage edged up 0.2% (19.4% y/y) to $374,500 in the December 5 week, following a 1.6% rise to $373,900 in the November 28 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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