U.S. Mortgage Applications Fall for Seventh Straight Week
by:Sandy Batten
|in:Economy in Brief
Summary
- Largest weekly decline since mid-February.
- Meaningful declines in both purchase and refinancing applications.
- Mortgage interest rates post significant weekly increases with 30-year rate rising to highest since mid-2009.
The Mortgage Bankers Association's Loan Applications Index declined 8.3% w/w (-51.4% y/y) in the week ended April 22, their seventh consecutive weekly decline. They had fallen 5.0% in the previous week. The most recent decline was to the lowest level since the week ended December 28, 2018. Applications for refinancing declined 9.0% w/w (-70.8% y/y) last week after a 7.7% w/w decline in the prior week. Applications for purchase fell 7.6% w/w (-16.6% y/y) on top of a 3.0% w/w decline in the prior week.
The share of applications for refinancing fell further to 35.0% in the week ended April 22 from 35.7%, down from 65.4% at the beginning to this year. By contrast, the adjustable-rate mortgage (ARM) share of activity continued to rise, increasing to 9.3% from 8.5% in the previous week.
Mortgage interest rates continued to climb. The effective rate on 30-year fixed-rate loans increased 17bps to 5.56%, its highest level since June 2009. The effective rate on 15-year fixed-rate loans rose 25bps to 4.88%%. The rate on a Jumbo 30-year loan increased 13bps to 5.02% and the rate on a 5-year ARM rose 26bps to 4.55%.
Applications for fixed-rate loans declined 9.0% w/w (-54.3% y/y) in the week ended April 22 following a 6.1% w/w decline in the prior week. Applications for adjustable-rate mortgages slipped for the first time in three weeks, edging down 0.3% w/w (+28.8% y/y) after a 9.1% jump in the previous week.
The average size of a mortgage loan rose slipped 0.7% w/w to $393,300 from a record $396,000 in the previous week. The average size of a loan for purchase fell 1.0% w/w to $449,100 while the average size of a refinanced loan edged down 0.6% w/w to $289,700.
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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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