Global| Nov 07 2018U.S. Mortgage Loan Applications Fall to Four-Year Low; Interest Rates Steady
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Applications Index declined 4.0% (-16.4% y/y) last week to the lowest level since December 2014. The decline followed a 2.5% shortfall in the prior week. Purchase loan [...]
The Mortgage Bankers Association reported that its total Mortgage Applications Index declined 4.0% (-16.4% y/y) last week to the lowest level since December 2014. The decline followed a 2.5% shortfall in the prior week. Purchase loan applications fell 5.0% (-0.2% y/y) after a 1.5% decline, while applications to refinance were off 2.5% (-33.2% y/y) following a 3.8% fall.
The effective interest rate on a 15-year fixed-rate mortgage was little changed w/w at 4.68%, but still was up sharply from 3.01% averaged in July 2016. The effective rate on a 30-year fixed-rate loan rose to 5.30%. The rate on a Jumbo 30-year loan was roughly stable at 5.05% and for adjustable 5-year mortgages, the effective interest rate was unchanged at 4.49%.
The average mortgage loan size was fairly steady at $292,800 (1.9% y/y). For purchases, the average loan size of $310,700 (-1.6% y/y) compared to $264,800 (2.7% y/y) for refinancings.
Applications for fixed-rate loans fell 19.9% y/y while applications for adjustable-rate loans declined 3.8% 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) | 11/02/18 | 10/26/18 | 10/19/18 | Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -4.0 | -2.5 | 4.9 | -16.4 | -17.8 | 15.6 | 17.9 |
| Purchase | -5.0 | -1.5 | 2.0 | -0.2 | 5.6 | 13.3 | 15.5 |
| Refinancing | -2.5 | -3.8 | 9.7 | -33.2 | -34.0 | 17.3 | 19.7 |
| 15-Year Mortgage Effective Interest Rate (%) | 4.68 | 4.67 | 4.64 | 3.65 (Nov'17) | 3.59 | 3.22 | 3.47 |
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.
More Economy in Brief
