U.S. Mortgage Applications Continue to Weaken
by:Tom Moeller
|in:Economy in Brief
Summary
- Loan refinancing declines sharply.
- Purchase applications ease.
- Interest rates edge lower.
The Mortgage Bankers Association's Loan Applications Index fell 1.2% (-54.5% y/y) in the week ended May 20 after declining 11.0% in the prior week. Applications to refinance an existing loan continued to lead the decline with 3.9% drop (-74.9% y/y) after falling 9.5% in the week earlier. Applications for purchase improved 0.2% (-16.4% y/y) after falling 11.9% in the prior week.
The share of applications for refinancing fell to 32.3% in the week ended May 20. That as half the percentage this past December and nearly the lowest reading since December 2000. The percentage that were ARMs fell to 9.4%
Applications for fixed-rate loans eased 0.3% (-57.1% y/y) in the week ended May 20. Meanwhile, applications for adjustable-rate mortgages fell 9.6% (+6.1% y/y).
The effective rate on 30-year fixed-rate loans slipped to 5.64% in the latest week from 5.70% in the prior week. It remained near the highest reading since June 2009. The rate for 15-year fixed mortgages slipped to 4.89% and for 30-year jumbos it eased to 5.14%. The rate on 5-year ARMs rose to 4.77%, up from 2.57% at the end of last year.
The average loan size of $383,000 as down sharply from $401,900 at the beginning of the month. The average size of a purchase loan fell to $432,000 from a high of $460,000 in the third week of March. The average refinancing loan size as $280,100, down from $302,000 at the beginning of the month.
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.
These 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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