U.S. Mortgage Applications Surged in the Week of January 9
Summary
- Purchase and refinancing loan applications jumped in the latest week.
- Effective interest rate on 30-year fixed loans fell to 6.35%.
- Average loan size rose.
Mortgage applications jumped 28.5% w/w (55.1% y/y) in the week ending January 9 after rising 0.3% w/w (+60.8% y/y) in the week of January 2, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house rose 15.9% w/w (14.0% y/y) in the week ending January 9 after falling 6.2% w/w (+24.7% y/y) in the week ending January 2 and following five consecutive weekly declines. Applications for loan refinancing surged 40.1% w/w (128.1% y/y) in the latest week, after a rise of 7.4% w/w (133.6% y/y) in the January 2 week.
The effective interest rate on a 30-year fixed-rate loan fell 7bps to 6.35% in the week ending January 9 from 6.42% in the week ending January 2. The rate on 15-year fixed-rate mortgages dropped 5bps to 5.75% in the latest week from 5.80% in the prior week. The 30-year Jumbo rate rose 9bps to 6.54% in the January 9 week from 6.45% in the January 2 week. The rate on a 5-year ARM dropped 38bps to 5.60% in the latest week after jumping 28bps to 5.98% in the January 2 week.
The share of applications for refinancing an existing loan rose to 60.2% of total applications in the January 9 week from 56.6% in the week ending January 2. The adjustable-rate mortgage (ARM) share of activity rose to 7.0% in the week ending January 9 from 6.3% in the week ending January 2.
The average size of a mortgage loan rose 6.3% w/w (9.9% y/y) to $403,600 in the week ending January 9 after declining 4.5% w/w (+5.6% y/y) to $379,800 in the week ending January 2. The average size of a purchase loan rose 7.7% w/w (4.9% y/y) to $440,300 in the latest week after dropping 4.2% w/w (-1.4% y/y) to $408,700 in the prior week. The average size of a loan to refinance a mortgage rose 6.0% w/w (27.8% y/y) to $379,200 in the week ending January 9 after retrenching 4.1% w/w (+27.8% y/y) to $357,700 in the January 2 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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