U.S. Mortgage Applications Posted Double-Digit Drop in the September 26 Week
Summary
- Purchase loan applications dropped 1.0% w/w, and refinancing loan applications plummeted 20.6% w/w.
- Effective interest rate on 30-year fixed-rate loans rose 13 bps.
- Average loan size declined.
Mortgage applications dropped 12.7% (+16.0% y/y) in the week ending September 26, following a rise of 0.6% (31.1% y/y) in the week ending September 19, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 1.0% (+15.7% y/y) in the latest week after advancing 0.3% (17.7% y/y) in the prior week. Applications for loan refinancing plummeted 20.6% (+16.3% y/y) in the week ending September 26, after rising 0.8% (42.1% y/y) in the week ending September 19.
The effective interest rate on a 30-year fixed-rate loan rose 13bps to 6.64% in the week ending September 26, from 6.51% in the week ending September 19. The rate on 15-year fixed-rate mortgages rose 6bps to 5.93% in the latest week from 5.87% in the week ending September 19 and was up from 5.78% in the September 12 week. The rate on 30-year jumbo loans rose by 12bps to 6.66% in the latest week from 6.54% in the week ending September 19. The rate on a 5-year ARM jumped 20bps to 5.91% in the week ending September 26 from 5.71% in the prior week which had been close to levels last seen in May 2023.
The share of applications for refinancing an existing loan dropped to 55.0% of total applications in the week ending September 26 after rising to 60.2% in the week ending September 19. The adjustable-rate mortgage (ARM) share of activity declined to 8.4% in the September 26 week from 8.9% in the September 19 week.
The average size of a mortgage loan declined by 5.0% (-0.1% y/y) to $408,000 in the week ending September 26, after also declining by 5.0% (+4.0% y/y) to $429,600 in the week ending September 19. The average size of a purchase loan edged up 0.2% (-1.3% y/y) to $442,000 in the latest week, after rising 0.7% (-1.4% y/y) to $441,300 in the week of September 19. The average size of a loan to refinance a mortgage dropped 9.9% (+1.0% y/y) to $380,100 in the latest week, following a decline of 8.6% (+9.4% y/y) to $421,800 in the September 19 week. The average loan refinancing size had risen 22.3% (29.7% y/y) to $461,300 in the September 12 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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