Global| Jul 22 2020U.S. Mortgage Loan Applications Rise with Rates Remaining Low
by:Sandy Batten
|in:Economy in Brief
Summary
• Mortgage applications rose for the third consecutive week with both purchase and refinancing applications up. • The 15-year fixed rate mortgage rate edged up slight after having been falling to a record low in the previous week. The [...]
• Mortgage applications rose for the third consecutive week with both purchase and refinancing applications up.
• The 15-year fixed rate mortgage rate edged up slight after having been falling to a record low in the previous week. The 30-year jumbo rate fell to a record low.
The Mortgage Bankers Association reported that its total Mortgage Applications Index increased 4.1% w/w (70.5% y/y) in the week ending July 17, following the previous week's 5.1% rise. Applications for both purchase and refinancing rose in the latest week though the overall gain was mostly in applications for refinancing. Applications for purchase increased 1.8% w/w (19.4% y/y) following a 6.1% w/w decline in the previous week. Applications for refinancing increase 5.3% w/w (122.0% y/y) after a 11.9% weekly jump in the previous week. The refinancing share of mortgage activity increased to 64.8% of total applications from 64.2% the previous week. Adjustable rate activity was unchanged at 3.0% of total applications.
The effective interest rate on a 15-year fixed-rate mortgage edged up to 2.80% in the week ending July 17 after having fallen to a record low of 2.78% in the previous week. The effective 30-year interest rate also rose marginally to 3.30% from a record low 3.29% in the previous week. The 30-year jumbo rate eased to 3.59%, a record low, from 3.61%. The five-year adjustable rate decreased to 2.94%, the lowest level since August 2016, from 3.00%.
The average mortgage loan size slipped to $328,900 from $330,600 the previous week. For purchases, the average loan size rose to $362,500 from $357,000 in the previous week. The average refinancing loan size fell to $310,700 from $315,900.
With interest rates low, applications for fixed-rate loans increased 76.0% y/y. Applications for adjustable-rate mortgage loans increase 9.8% y/y, their first yearly increase since March.
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) | 07/17/20 | 07/10/20 | 07/03/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 4.1 | 5.1 | 2.2 | 70.5 | 32.4 | -10.4 | -17.8 |
| Purchase | 1.8 | -6.1 | 5.3 | 19.4 | 6.6 | 2.1 | 5.6 |
| Refinancing | 5.3 | 11.9 | 0.4 | 122.0 | 71.1 | -24.3 | -34.0 |
| 15-Year Effective Mortgage Interest Rate (%) | 2.80 | 2.78 | 2.85 |
3.54 |
3.71 | 4.35 | 3.59 |
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.
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