U.S. Mortgage Applications Continue to Decline

• Applications for both purchases and refinancing continue to decline.

• Mortgage interest rates edged up slightly last week.

The Mortgage Bankers Association Mortgage Loan Applications Index fell 5.1% w/w (-3.4% y/y) in the week ended April 2, the fifth consecutive weekly decline. Applications for refinancing declined 5.3% w/w (-20.4% y/y) after a 2.5% weekly decline the previous week. Refinancing applications have fallen steadily from their most recent peak in mid-January. Applications to purchase a home decreased 4.6% w/w (+52.6% y/y), their second weekly decline in six weeks.

The refinance share of mortgage activity edged down to 60.3% from 60.6% of total applications. This share has declined relatively steadily from a recent peak of 74.8% in early January. By contrast, the adjustable rate mortgage (ARM) share of activity continued to rise, increasing to 3.7% last week from 3.4% the prior week, its highest level since last July.

Mortgage interest rates edged up slightly last week and are 35-55 basis points higher than at the beginning of this year. The effective interest rate on a 30-year mortgage was 3.48% up from 3.44% in the prior week, and 52 basis points above the 2.96% rate at the beginning of the year. The effective 15-year rate edged up 2 basis points to of 2.82% versus 2.47% as the year began. The effective rate for a 30-year Jumbo mortgage rose 10 basis points to 3.53%. The rate on a five-year ARM rose 9 basis points to 3.09%, its fourth consecutive weekly increase.

The average mortgage loan size fell 0.7% w/w to $322,700 in the week ended April 2. The average size of a purchase loan edged down 0.5% w/w to $399,500. The average purchase loan has continued to decline after reaching a record high of $418,000 in the third week of February. The average size of a refinanced loan fell 1.1% w/w to $272,100.

Applications for fixed-rate loans fell 5.4% w/w (-3.8% y/y) last week, their fifth consecutive weekly decline. By contrast, applications for adjustable-rate mortgages rose 2.8% w/w (+8.3% y/y) last week, the third consecutive weekly rise.

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.