Kathleen Stephansen, CBE

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Mortgage applications jumped 33.3% (6.6% y/y) in the week ended January 10, after a decline of 3.7% (-11.6% y/y) in the week ended January 3, and ending a streak of four consecutive weekly declines. Applications for loans to purchase a house jumped 26.9% (-0.1% y/y) in the week ended January 10, following a drop of 6.6% (-14.1% y/y) in the week ended January 3. Applications to refinance a loan surged 43.5% (22.2% y/y) in the latest week, after a rise of 1.5% (-5.7% y/y) in the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey and the amounts quoted are seasonally adjusted.

The effective interest rate on a 30-year fixed rate loan was 7.28% in the week ended January 10, up 10bps from 7.18% in the week ended January 3. The effective rate on a 15-year fixed rate mortgage inched down 1bp to 6.61% in the week ended January 10 from 6.62% in the week ended January 3. The rate on a 30-year jumbo loan rose 2bps to 7.22% in the latest week from 7.20% in the January 3 week. The rate on a 5-year ARM rose 31bps to 6.38% from 6.07% in the week ended January 3.

The share of applications to refinance an existing mortgage was 42.7% in the week ended January 10, up from 40.8% in the week ended January 3. The share of applications for ARMs was 5.0% in the latest week, up from 4.7% in the January 3 week.

The average loan size in the January 10 week was $367,100, up 2.1% (1.7% y/y) from $359,500 in the January 3 week. The average size of an application for a loan to purchase a house was up 1.3% (1.1% y/y) to $419,600 in the week ended January 10 from $414,400 in the week ended January 3. The average size of an application to refinance an existing loan rose by 6.0% (9.6% y/y) to $296,800 in the week ended January 10 from $279,900 in the week ended January 3. 

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.

- Applications to purchase and to refinance loans jumped.
- Rates on 30-year fixed-rate loans rose moderately.
- Average loan size rose modestly in latest week.


U.S. Mortgage Applications Surged in the January 10 Week

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The Producer Price Index for final demand rose 0.2% (3.3% y/y) in December, following an increase of 0.4% (3.0% y/y) during November, according to the Bureau of Labor Statistics (BLS). The December monthly reading compared to a 0.4% rise expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services edged 0.1% higher (3.3% y/y) following a similar monthly rise (3.5% y/y) in November. The PPI excluding food & energy was unchanged (3.5% y/y) in December after rising 0.2% (3.5% y/y) in November. The BLS reported that on an unadjusted basis, prices for final demand increased 3.3% in 2024 after moving up 1.1% in 2023, while prices for final demand excluding food, energy & trade services rose 3.3% in 2024 following a 2.7% advance in 2023.

Final demand food prices eased 0.1% (4.7% y/y) in December, following a rise of 2.9% (4.9% y/y) in November, revised from a rise of 3.1% (4.9% y/y). Prices for fresh and dry vegetables declined by 14.7% (+21.3% y/y), while egg prices rose 0.5% (127.9% y/y) after a surge of 55.6% over the month in November.

Energy prices increased 3.5% (-2.0% y/y) during December, after holding steady (-6.1% y/y) in November, revised from a rise of 0.2% (-6.2% y/y). Gasoline costs rose 9.7% (-2.5% y/y) while home heating oil prices rose 4.0% (-12.6% y/y). Electric power prices rose 1.0% (1.8% y/y) and natural gas costs gained 0.7% (2.2% y/y). Diesel fuel dropped 1.3% (-13.9% y/y).

Final demand goods prices excluding food & energy were unchanged over the month (2.1% y/y) during December, following a rise of 0.2% (2.2% y/y) in November. Core finished consumer goods prices increased 0.1% (2.4% y/y) after a rise of 0.3% (2.3% y/y) in November. The increase in core nondurable goods prices rose 0.1% (2.9% y/y) last month after a rise of 0.4% (2.9% y/y) in November. Durable consumer goods prices rose 0.2% (1.6% y/y) in December following a rise of 0.1% (1.3% y/y) in November. Capital equipment prices rose 0.2% (2.8% y/y) last month following a similar monthly rise (2.7% y/y) in November. Core government-purchased goods prices edged 0.1% higher (2.1% y/y) in December, after similar monthly and year-on-year rises in November.

Final demand services prices were unchanged (4.0% y/y) in December after rising 0.3% (3.9% y/y) in November. Trade services prices eased 0.1% (+4.4% y/y) last month following a rise of 0.7% (3.2% y/y). Trade of finished goods prices were unchanged (3.8% y/y) in December, after rising 0.6% (2.8% y/y) in November. Prices for final demand transportation and warehousing services rose 2.2% (2.1% y/y) last month, after falling 0.6% (-0.3% y/y) in November. Services prices less these costs fell 0.2% (+4.1% y/y) last month, after a rise of 0.2% (4.7% y/y) in November.

Construction costs rose 0.2% (1.7% y/y) in December, after holding steady (+1.6% y/y) during November.

Prices for intermediate demand of processed goods rose 0.3% (0.2% y/y) in December after holding steady (-0.6% y/y) in November. Processed energy goods prices rose 1.6% last month after easing 1.2% in November, while food prices rose 0.4% following a 0.8% advance in November.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

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- Overall index rise softer than expected.
- Advance in core goods prices is steady.
- Advance in services price is steady.

U.S. PPI and Core PPI Gains Ease in December

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The ADP National Employment Report indicated that nonfarm private sector payrolls rose 122,000 (1.4% y/y) during December, after increasing 146,000 during November. These increases leave the 154,000 average in Q4 above its 129,333 average in Q3 but below this year’s high of 181,000 in March. A 138,000 November rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" of 4.6% y/y in December down from 4.8% y/y in November and remains the weakest since July 2021 and well below a September 2022 high of 7.8% y/y. Pay increases in education & health services were 4.9% y/y. Construction sector earnings rose 5.1% y/y. Manufacturing pay growth of 4.5% y/y is the lowest in 2024; leisure & hospitality pay rose a diminished 4.6 % y/y. Professional & business services pay grew a slower 4.5% y/y. Pay increases for “job changers” averaged 7.1% y/y in December, down from 7.2% y/y in November.

Small business hiring (less than 50 employees) rose by 5,000 (0.1% y/y) in December, following a decline of 15,000 in November, revised from a decline of 17,000. Employment at medium-sized firms (50-499,000 employees) rose 9,000 (1.6% y/y) after an increase of 44,000, revised from 42,000 in November. These gains remained below the March high of 113,000. Large business hiring (500+ employees) rose 97,000 (4.0% y/y) in December, following a 113,000 gain during November, revised from 120,000.

Goods-producing employment rose 10,000 (1.5% y/y) last month, after a 9,000 rise in November, revised from 6,000. The number of construction sector jobs rose 27,000 (4.8% y/y) following 23,000 gain in November, revised from 30,000. Jobs in the manufacturing sector fell 11,000 (-0.4% y/y) in December, after a 16,000 decline in November, revised from a decline of 26,000. Natural resource & mining hiring dropped by 6,000 (+0.9% y/y) last month, following a 2,000 gain in November.

The number of service-producing jobs rose 112,000 (1.4% y/y) during December, following a 137,000 rise in November, revised from 140,000. Education employment strengthened 57,000 (1.7% y/y) last month, after rising 52,000 in November, revised from 50,000. The number of jobs in trade, transportation & utilities increased 8,000 (1.0% y/y), after a 29,000 gain in November, revised from 28,000. Employment in “other” services rose 13,000 (4.1% y/y), following a 15,000 gain in November, revised from 20,000. Professional & business services employment eased 5,000 (0.2% y/y) in December, after rising 19,000 the prior month, revised slightly from 18,000. Leisure & hospitality employment rose 22,000 (2.4% y/y) last month, from a 17,000 rise, revised from15,000 in November. Financial sector employment rose 12,000 (2.0% y/y) in December, from 3,000 in November, revised from 5,000, while information employment rose 5,000 (-1.2% y/y) from 2,000 last month, revised down from 4,000.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

The minutes to the latest **FOMC meeting** can be found [here](https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20241218.pdf).

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- Employment increase led by hiring in services.
- Wage gain for “job changers” stabilizes.
- Construction employment improves, while factory jobs decline.

U.S. ADP Payroll Gain Moderates in December

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Mortgage applications declined 3.7% (-11.6% y/y) in the week ended January 3, 2025, after the drop of 12.6% (+0.8% y/y) in the week ended December 27. Applications for loans to purchase a house dropped 6.6% (-14.1% y/y) in the week ended January 3, following a decline of 6.8% (-2.8% y/y) in the week ended December 27. Applications to refinance a loan rose 1.5% (-5.7% y/y) in the latest week, after the sharp decline of 23.4% (+10.3% y/y) in the week ended December 27. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey and the amounts quoted here are seasonally adjusted.

The effective interest rate on a 30-year fixed rate loan was 7.18% in the week ended January 3, unchanged from the week ended December 27 but up 10bps from 7.08% in the week ended December 20. The effective rate on a 15-year fixed rate mortgage inched up to 6.62% in the week ended January 3, from 6.61% in the week ended December 27. The rate on a 30-year jumbo loan dropped 12bps to 7.20% in the January 3 week, after rising 16bps to 7.32% in the week ended December 27. The rate on a 5-year ARM dropped another 14bps to 6.07% in the week ended January 3, after declining 11bps to 6.21% in week ended December 27.

The share of applications to refinance an existing mortgage was 40.8% in the week ended January 3, up from 39.4% in the week ended December 27. That share had been 44.3% in the December 20 week. The share of applications for ARMs was 4.7% in the latest week down from 5.2% in the week ended December 27.

The average loan size in the January 3 week was $359,500, down 2.3% (+1.7% y/y) from $367,800 in the December 27 week. The average size of an application for a loan to purchase a house was down 2.0% (+2.9% y/y) to $414,400 in the week ended January 3 from $422,900 in the December 27 week. The average size of an application to refinance an existing loan declined by 1.0% (+2.1% y/y) to $279,900 in the week ended January 3 from $282,800 in the week ended December 27.

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.

- Applications to purchase dropped, while applications to refinance rose.
- Rates on 30-year fixed-rate loans were unchanged.
- Average loan size declined in latest week.

U.S. Mortgage Applications Declined in the First Week of January

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Mortgage applications dropped 12.6% (+0.8% y/y) in the week ended December 27, after declining by 10.7% (+3.0% y/y) in the week ended December 20 and by 0.7% (+16.9% y/y) in the week ended December 13. Applications for loans to purchase a house dropped 6.8% (-2.8% y/y) in the week ended December 27, following a decline of 6.7% (-3.7% y/y) in the week ended December 20. Applications to refinance a loan plummeted 23.4% (+10.3% y/y) in the week ended December 27, following a decline of 16.4% (+18.0% y/y) in the week ended December 20. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey and the amounts quoted here are seasonally adjusted.

The effective interest rate on a 30-year fixed rate loan was 7.18% in the week ended December 27, up 10bps from 7.08% in the week ended December 20, and up 23bps from 6.95% in the week ended December 13. The effective rate on a 15-year fixed rate mortgage rose 6bps to 6.61% in the week ended December 27, after a 23bps rise to 6.55% in the week of December 20. The rate on a 30-year jumbo loan rose 16bps to 7.32% in the week ended December 27, after rising 13bps to 7.16% in the December 20 week. The rate on a 5-year ARM dropped 11bps to 6.21% in week ended December 27 after rising by 11bps to 6.32% in the week ended December 20.

The share of applications to refinance an existing mortgage was 39.4% in the week ended December 27, down from 44.3% in the December 20 week and from 46.7% in the December 13 week. The share of applications for ARMs was 5.2% in the latest week, down from 5.5% in the December 20 week and from 5.3% in the week ended December 13.

The average loan size in the December 27 week was $367,800, down 0.8% (+3.2% y/y) from $370,900 in the week ended December 20, which was down 1.4% (+0.9% y/y) from the week ended December 13. The average size of an application for a loan to purchase a house was down 0.3% in each of the last two weeks, to $422,900 (+3.9% y/y) in the December 27 week and to $424,100 (+2.1% y/y) in the December 20 week. The average size of an application to refinance an existing loan declined by 7.0% (+5.7% y/y) to $282,800 in the week ended December 27 and by 4.9% (3.5%), to $304,100 in week of December 20.

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.

- Applications to purchase and to refinance plummeted.
- Rates on 30-year fixed-rate loans rose by 23bps in the last 2 weeks.
- Average loan size declined in the last 2 weeks.

U.S. Mortgage Applications Dropped in the Last Two Weeks of December

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Kathleen Stephansen, CBE

Publications by Kathleen Stephansen, CBE

U.S. Mortgage Applications Surged in the January 10 Week

U.S. PPI and Core PPI Gains Ease in December

U.S. ADP Payroll Gain Moderates in December

U.S. Mortgage Applications Declined in the First Week of January

U.S. Mortgage Applications Dropped in the Last Two Weeks of December