Global| Oct 28 2020U.S. Mortgage Applications Rebound as Rates Slip
by:Sandy Batten
|in:Economy in Brief
Summary
• Led by 2.5% w/w jump in refinancing applications. • Purchase applications were essentially unchanged. • Fixed mortgage interest rates generally declined with the Jumbo rate falling to a new record low. The Mortgage Bankers [...]
• Led by 2.5% w/w jump in refinancing applications.
• Purchase applications were essentially unchanged.
• Fixed mortgage interest rates generally declined with the Jumbo rate falling to a new record low.
The Mortgage Bankers Association Mortgage Loan Applications Index rebounded in the most recent week, rising 1.7% w/w (55.6% y/y) after having declined in each of the previous two weeks. Purchase applications were essentially unchanged (+0.2% w/w, 23.5% y/y) after having fallen in each of the four previous weeks. Applications to refinance an existing loan jumped up 2.5% w/w (79.7% y/y). The refinance share of mortgage activity increased to 66.7% of total applications from 66.1% in the previous week. The adjustable-rate mortgage (ARM) share of activity edged up to 2.1% of total applications.
Interest rates generally edged down last week. The effective rate on a 30-year fixed rate interest rate slipped to 3.10%, retouching its record low of two weeks earlier, from 3.13%. The rate on 15-year loans was unchanged at 2.69%, just two basis points above its all-time low reached two weeks ago. The effective rate for a Jumbo mortgage loan fell five basis points to a new record low of 3.37%% (this series began in January 2011). The rate on the 5-year adjustable rate mortgage jumped up 21 basis points to 3.28%. It has risen 44 basis points in the past two weeks.
The average mortgage loan size rose 0.8% w/w (2.0% y/y) to $322,900. The average size of a purchase loan rose 0.2% (12.5% y/y) to a new record high of $372,600. The average loan size to refinance increased 1.4% (-2.6% y/y) to $298,100.
Applications for fixed-rate loans rose 1.5% w/w (60.6% y/y) and applications for adjustable-rate mortgages jumped up 12.7% w/w (-36.0% y/y).
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 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) | 10/23/20 | 10/16/20 | 10/09/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 1.7 | -0.6 | -0.7 | 55.6 | 32.4 | -10.4 | -17.8 |
| Purchase | 0.2 | -2.1 | -1.6 | 23.5 | 6.6 | 2.1 | 5.6 |
| Refinancing | 2.5 | 0.2 | -0.3 | 79.7 | 71.1 | -24.3 | -34.0 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.10 | 3.13 | 3.10 | 4.08
(Oct '19) |
4.34 | 4.94 | 4.32 |
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
More Economy in Brief
