U.S. Mortgage Applications Continue to Decline as Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
- Refinancing falloff is pronounced.
- Purchase applications reverse earlier increase.
- Mortgage interest rates increase modestly w/w.
The Mortgage Bankers Association's Loan Applications Index declined 5.0% (-48.4% y/y) in the week ended April 15, the sixth consecutive weekly decline. The decline was to the lowest level since the week ended February 8, 2019. Applications for refinancing declined 7.7% (-68.2% y/y) last week following a 4.9% weakening in the previous week. Applications for purchase fell 3.0% (-14.0% y/y) following a 1.4% gain in the prior week.
The share of applications for refinancing fell sharply to 35.7%, down from 76.5% early in March 2020. The adjustable-rate mortgage (ARM) share of activity rose to 10.6% from 9.2% in the previous week.
The effective rate on 30-year fixed-rate loans increased to 5.39%, the highest level since April 2010. The effective rate on 15-year fixed-rate loans rose to 4.63%. The rate on a Jumbo 30-year loan increased to 4.89% and the rate on a 5-year ARM was little-changed at 4.29%.
Applications for fixed-rate loans declined 6.1% (-51.0% y/y) in the week ended April 15 after falling 1.9% in the previous week. Applications for adjustable-rate mortgages increased 9.1% (+21.2% y/y) following an 8.3% rise in the previous week.
The average size of a mortgage loan rose 1.0% (19.9% y/y) to a record $396,000. The average size of a loan for purchase edged up 0.2% (11.7% y/y) to $453,800. The average size of a refinanced loan gained 1.1% (4.3% y/y) to $291,500.
This survey covers over 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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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