Global| Sep 20 2017U.S. Mortgage Loan Applications Decline as Interest Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index backpedaled 9.7% (-21.3% y/y) in the week ended September 15 and reversed the prior week's gain. Purchase applications fell 10.8% (+1.6% y/y) [...]
The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index backpedaled 9.7% (-21.3% y/y) in the week ended September 15 and reversed the prior week's gain. Purchase applications fell 10.8% (+1.6% y/y) following a 10.9% rise. Applications to refinance were off 8.5% and remained down by roughly one-third y/y.
The effective interest rate on a 15-year mortgage rose to 3.46% from 3.40%. The effective rate on a 30-year fixed-rate loan was little-changed at 4.16%. The rate on a Jumbo 30-year loan eased slightly to 4.05%. For adjustable 5-year mortgages, the effective interest rate rose to 3.42%.
The average mortgage loan size slipped to $297,800, up 7.1% y/y. For purchases, the average loan size rose to $313,900 (3.4% y/y); for refinancings, it declined to $282,900 (+7.4% y/y).
Applications for adjustable rate loans rose 22.5% y/y, while applications for fixed rate loans fell 23.3% 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) | 09/15/ 17 | 09/08/17 | 09/01/17 | Y/Y | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -9.7 | 9.9 | 3.3 | -21.3 | 15.6 | 17.9 | -41.4 |
| Purchase | -10.8 | 10.9 | 1.4 | 1.6 | 13.3 | 15.5 | -12.9 |
| Refinancing | -8.5 | 8.9 | 5.1 | -35.1 | 17.3 | 19.7 | -52.8 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.46 | 3.40 | 3.44 | 3.04 (Sep. '16) | 3.22 | 3.37 | 3.54 |
U.S. Existing Home Sales Ease, as Prices Also Dip Sales of existing homes fell 1.3% (+2.1% y/y) during July to
5.440 million units (AR) from a slightly revised 5.510 million in June. It was
the lowest volume of sales since August 2016. Expectations were for 5.570
million sales in the Action Economics Forecast Survey. Sales of existing single-family homes fell 0.8% (+1.7% y/y)
to 4.840 million while sales of co-ops and condos dropped 4.8% (+5.3% y/y) to
600,000. By region, total existing home sales fell the most in the
northeast, 14.5% (-1.5% y/y), to 650,000 from 760,000 in June. Sales in the
Midwest fell 5.3% (-1.6% y/y) to 1.250 million from 1.320 million. But sales
improved in the west, 5.0% (+5.0%) to 1.260 million from 1.200 million, and
those in the south gained 2.2% (+3.6% y/y) in July to 2.280 million from 2.230
million in June. The median price of all existing homes sold decreased 1.9%
(6.2% y/y) to $258,300. The number of homes on the market was down 1.0% (-9.0% y/y)
to 1.92 million. There was a 4.2 months' supply of those homes available for
sale, up from a recent low of 3.5 months in January, but down from 4.8 months a
year ago. The data on existing home sales, prices and affordability are
compiled by the National Association of Realtors and can be found in Haver's USECON
database. The regional price, affordability and inventory data are available in
the REALTOR database. The expectations figure is from the Action
Economics Forecast Survey, reported in the AS1REPNA database.
by Tom Moeller
September 20, 2017
Existing Home Sales (SAAR,
000s)
Aug
Jul
Jun
Y/Y %
2016
2015
2014
Total
5,440
5,510
2.1
5,440
5,234
4,923
Northeast
650
760
-1.5
735
685
641
Midwest
1,250
1,320
-1.6
1,296
1,231
1,134
South
2,280
2,230
3.6
2,217
2,148
2,048
West
1,260
1,200
5.0
1,193
1,170
1,100
Single-Family
4,840
4,880
1.7
4,828
4,624
4,333
Median Price Total ($, NSA)
258,300
263,300
6.2
232,067
219,867
206,708
FOMC Holds Rates Steady; Asset Sales to Begin Soon
by Tom Moeller September 20, 2017
At today's meeting of the Federal Open Market Committee, the targeted federal funds rate was held steady in a range of 1.00% to 1.25%. This followed two increases earlier this year.
Additionally, the Fed indicated that shrinking its bondholdings would begin "relatively soon."
The Fed expects moderate economic growth to continue and that inflation would stabilize near its two percent objective.
The press release for today's FOMC meeting can be found here.
Haver's SURVEYS database contains the economic projections from the Federal Reserve Board.
| Current | Last | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate Target | 1.00%-1.25% | 1.00%-1.25% | 0.40% | 0.13% | 0.09% | 0.11% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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