Global| Jan 22 2020U.S. Mortgage Applications Ease after Prior Week's Surge
Summary
The Mortgage Bankers Association reported that its Mortgage Loan Index decreased 1.2% in the January 17 week after the prior week's 30.2% jump; the modest fall in the latest week still left it 51.3% above a year ago. Applications to [...]
The Mortgage Bankers Association reported that its Mortgage Loan Index decreased 1.2% in the January 17 week after the prior week's 30.2% jump; the modest fall in the latest week still left it 51.3% above a year ago. Applications to refinance a loan declined 1.8% w/w (116.3% y/y), following the prior week's 42.7% surge. Purchase applications were down 2.0% w/w (9.3% y/y) after the notable 15.5% advance the week before.
The effective interest rate on a 15-year fixed-rate mortgage fell in the latest week from 3.36% to 3.30% in a fourth consecutive weekly decline, yet again the lowest reading since November 2016. This rate has generally fallen from its recent high of 4.71% reached in early November 2018. The effective rate on a 30-year fixed-rate loan edged lower to 3.95% from 3.96%. The effective rate on a 30-year Jumbo mortgage, however, edged higher to 3.93% from 3.90%. The interest rate on an adjustable rate mortgage eased to 3.38% after rising notably in the January 10 week to 3.39% from 3.26% the week before that.
The average mortgage loan size increased 0.4% to $317,400 (+0.9% y/y) after the previous week's 6.0% surge to $316,100. The average loan size for purchases rose 2.2% to $334,000 (+8.3% y/y). The average loan size for refinancings was $307,000, down 0.9% (-4.6% y/y) after the prior week's 9.0% surge to $309,700.
Applications for fixed-rate loans surged 57.5% y/y while applications for adjustable rate loans declined 16.8% y/y in the week ended January 17.
The 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 each index 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) | 01/17/20 | 01/10/20 | 01/03/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -1.2 | 30.2 | 13.5 | 51.3 | 32.4 | -10.4 | -17.8 |
| Purchase | -2.0 | 15.5 | 3.0 | 9.3 | 6.6 | 2.1 | 5.6 |
| Refinancing | -1.8 | 42.7 | 24.6 | 116.3 | 71.1 | -24.3 | -34.0 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.30 | 3.36 | 3.42 | 4.26 (Jan'19) | 3.71 | 4.35 | 3.59 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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