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Economy in Brief

U.S. Mortgage Applications Rise
by Sandy Batten  May 12, 2021

• Only the second increase in the past ten weeks.

• Increase led by rise in applications for refinancing; applications to purchase posted only a small gain.

• Mortgage interest rates fell.

The Mortgage Bankers Association Mortgage Loan Applications Index increased 2.1% w/w (-4.2% y/y) in the week ended May 7, following a 0.9% decline in the previous week. This was only the second weekly increase in the past ten weeks. Applications to purchase a home edged up 0.8% w/w (13.7% y/y) versus a 2.5% decline in the previous week, and applications for refinancing jumped up 2.9% w/w (-11.5% y/y) after a 0.1% increase in the previous week.

The refinance share of mortgage activity edged up to 61.3% of total applications in the week ended May 7, its highest level since mid-March, from 61.0% in the previous week. The adjustable rate mortgage (ARM) share of activity slipped to 3.8% last week from 3.9% the previous week but remained well above its January 8 low of 1.6%.

Mortgage interest rates fell across the board last week. The effective interest rate on a 30-year mortgage declined seven basis points to 3.21%, its fifth decline in the past seven weeks but still above its 2.95% low reached in December. The effective 15-year rate fell six basis points to 2.56%, its fifth consecutive weekly decline. The effective rate for a 30-year Jumbo mortgage edged down two basis points to 3.37%. The rate on a five-year ARM plunged 19 basis points to 2.65%, its lowest level since April 2013.

The average mortgage loan size increased 0.2% w/w to $337,700 in the May 7 week, up from $337,000 the prior week. The average size of a loan to purchase a house rose 0.4% to $409,800. The average size of a refinance loan increased 0.3% to $292,300.

Applications for fixed-rate loans rose 2.2% (-5.1%y/y), only their second weekly increase in the past ten weeks. Applications for adjustable-rate mortgages increased 1.1% w/w (27.8% y/y) on top of 9.4% gain in the previous week.

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 SURVEYW database.

MBA Mortgage Applications (%, SA) 05/07/21 04/30/21 04/23/21 Y/Y 2020 2019 2018
Total Market Index 2.1 -0.9 -2.5 -4.2 63.0 32.4 -10.4
  Purchase 0.8 -2.5 -4.8 13.7 11.4 6.6 2.1
  Refinancing 2.9 0.1 -1.1 -11.5 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.21 3.28 3.26 3.50

(May '20)

3.40 4.34 4.94
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