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Economy in Brief

U.S. Mortgage Applications Rise for Both Purchase and Refinance
by Carol Stone, CBE  September 22, 2021

• Applications for refinancing increase 6.5%.

• Rates edge lower again, and 5-year ARMs hit a new low.

• The average size of loans decreases modestly.

The Mortgage Bankers Association's Loan Applications Index surged 4.9% in the week ended September 17, but was still 8.1% below the comparable week a year ago. In the week ended September 10, the index had risen 0.3%. In the latest week, applications advanced for loans both for purchase and for refinance; the bigger gain was in refinance loans, up 6.5% (-5.3% y/y) after a declining 3.2% in the September 10 week, with two prior weekly declines. Applications for loans to purchase a house increased 2.2% in the September 17 week (-13.2% y/y) following the previous week's sizable advance of 7.5%.

The share of applications for refinancing rose to 66.2% in the week of September 17 from 64.9% the week before. The adjustable-rate mortgage (ARM) share of activity decreased to 2.9% from 3.3% the week before.

The effective interest rate on a 30-year mortgage edged down to 3.11% in the week ended September 17 from 3.12% the week before. The effective 15-year rate was 2.40%, following 2.41% the prior week. The effective rate for a 30-year Jumbo mortgage loan was 3.18%, after the prior week's 3.19%. For 5-year adjustable-rate loans, the effective rate touched an all-time low of 2.55% in the September 17 week compared to 2.72% the week before These last two series date back only to January 2011, while the others begin in January 1990

Applications for fixed-rate loans increased 5.3% (-8.8% y/y) in the week ended September 17, following a dip of 0.5% the week before. Applications for adjustable-rate mortgages declined 6.4% (+19.9% y/y) after their jump of 30.8% the prior week.

The average size of mortgage loans was $333,200 in the week of September 17, down from $338,500 the prior week. The average size of loans for purchase was $396,300 in the September 17 week, marginally less than $396,800 the week before. The average size of refinance loans fell to $301,000 in the latest week from $307,000 the week before.

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) 09/17/21 09/10/21 09/03/21 Y/Y 2020 2019 2018
Total Market Index 4.9 0.3 -1.9 -8.1 63.0 32.4 -10.4
  Purchase 2.2 7.5 -0.2 -13.2 11.4 6.6 2.1
  Refinancing 6.5 -3.2 -2.8 -5.3 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.11 3.12 3.12 3.19

(Sep '20)

3.40 4.34 4.94
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