Mortgage Applications Continue to Fall as Interest Rates Rise in Latest Week
by:Tom Moeller
|in:Economy in Brief
Summary
- Refinancing loans fall sharply and purchase loan applications decline as well.
- Effective interest rate increases to two-month high.
- Average loan size falls sharply.
Mortgage applications declined 12.7% (+18.7% y/y) in the week ended April 18 after dropping 8.5% in the week ended April 11, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications to refinance an existing mortgage plunged 20.0% (+42.5% y/y) in the week ended April 18, after falling 12.4% one week earlier. Loan applications to purchase a home declined 6.6% (+6.4% y/y) in the latest week, after falling 4.9% in the prior week.
The effective interest rate on a 30-year fixed rate loan rose to 7.09% in the week ended April 18 from 6.99% in the week ended April 11 and 6.79% one week prior. The effective rate on a 15-year fixed rate loan rose to 6.34% in the week of April 18 from 6.27% one week earlier. The rate on a 30-year jumbo loan jumped to 7.03% last week from 6.93% in the prior week, while the rate on a 5-year ARM eased to 6.19% in the week ended April 18 after rising to 6.31% in the week ended April 11.
The share of applications to refinance an existing mortgage declined to a 10-month low of 37.3% in the week ended April 18 from 41.3% in the prior week. The share of loans with an adjustable rate fell to 7.5% in the latest week, following a rise to 9.6% in the prior week.
The average size of a mortgage loan dropped to $386,800 (+1.3% y/y) in the week ended April 18, after falling to $415,100 in the prior week. The average size of a loan to purchase a home declined to $439,900 (+0.5% y/y) from $445,300 in the week prior. The average size of a loan to refinance an outstanding mortgage dropped to $297,700 (+16.4% y/y) in the week ended April 18 from $372,300 in the week ended April 11.
The Mortgage Bankers Association Survey covers 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 SURVEYS database.
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.
