Global| Jan 19 2018U.S. Mortgage Loan Applications Increase as Interest Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index rose 4.1% last week (6.3% y/y) following an 8.3% rise during the prior week. Purchase loan applications rose 2.7% (8.6% y/y) following a 5.0% [...]
The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index rose 4.1% last week (6.3% y/y) following an 8.3% rise during the prior week. Purchase loan applications rose 2.7% (8.6% y/y) following a 5.0% gain. Applications to refinance increased 4.4% (4.0% y/y) following an 11.4% surge.
The effective interest rate on a 15-year mortgage jumped to 3.88%, and was up sharply from 3.46% in September. The effective rate on a 30-year fixed-rate loan increased to 4.48%. The rate on a Jumbo 30-year loan rose to 4.35%. For adjustable 5-year mortgages, the effective interest rate increased to 3.80%, up from September's low of 3.25%.
The average mortgage loan size improved to $280,400, up 3.8% y/y. For purchases, the average loan size increased to $301,200 (-1.5% y/y); for refinancings, it rose to $261,300 (9.6% y/y).
Applications for adjustable-rate loans declined 2.1% y/y, while applications for fixed-rate loans rose 6.8% 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) | 01/12 | 01/05/18 | 12/29/17 | Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 4.1 | 8.3 | -1.6 | 6.3 | -17.8 | 15.6 | 17.9 |
| Purchase | 2.7 | 5.0 | -2.6 | 8.6 | 5.6 | 13.3 | 15.5 |
| Refinancing | 4.4 | 11.4 | -0.5 | 4.0 | -34.0 | 17.3 | 19.7 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.88 | 3.76 | 3.72 | 3.65 (Jan. '17) | 3.59 | 3.22 | 3.37 |
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.
