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Economy in Brief

U.S. Mortgage Loan Applications Continue Lower
by Tom Moeller  June 9, 2021

• Refinancing applications fall sharply, purchases edge higher.

• Mortgage interest rates ease slightly.

• Applications influenced by late holiday.

The Mortgage Bankers Association's Loan Applications Index fell 3.1% (-25.7% y/y) in the week ended June 4, following a 4.0% decline in the previous week. It was the third consecutive weekly drop. Applications for refinancing weakened 5.1% (-26.8% y/y), also the third consecutive weekly decline. Applications to purchase a home improved 0.3% (-24.0% y/y) after falling 3.1% in the previous week. The timing of the Memorial Day holiday and the lifting of COVID-19 lockdowns influenced mortgage applications last week, according to the Association.

The refinance share of mortgage activity fell to 60.4% of total applications in the week ended June 4, from 61.3% in the previous week. That share is down from 73.1% during all of December. The adjustable-rate mortgage (ARM) share of activity rose w/w to 3.9% after falling sharply to 3.7% in the previous week. It was increased from 1.9% in November & December of last year.

The effective interest rate on a 30-year mortgage eased five basis points to 3.24% and remained above its 2.95% low reached in December. The effective 15-year rate fell four basis points to 2.59%. The effective rate for a 30-year Jumbo mortgage declined to 3.38% and reversed the prior week's six basis point rise from 3.39%. The rate on a five-year ARM was unchanged at 2.65% and remained below the 4.61% high in October 2018.

The average mortgage loan size edged 0.2% higher (6.0% y/y) to $338,000 in the June 4 week. The average size of a loan to purchase a house slipped 0.3% (+16.8% y/y) to $407,000. The average size of a refinanced loan rose 0.2% (-2.4% y/y) to $292,900.

Applications for fixed-rate loans fell 3.3% (-18.4% y/y) after declining 3.7% in the prior week. Applications for adjustable-rate mortgages rose 2.5% (2.6% y/y) following an 11.7% decline.

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) 06/04/21 05/28/21 05/21/21 Y/Y 2020 2019 2018
Total Market Index -3.1 -4.0 -4.2 -25.7 63.0 32.4 -10.4
  Purchase 0.3 -3.1 1.7 -24.0 11.4 6.6 2.1
  Refinancing -5.1 -4.6 -7.2 -26.8 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.24 3.29 3.28 3.41

(Jun '20)

3.40 4.34 4.94
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