Mortgage Applications Decline as Rates Edge Higher in Latest Week
by:Tom Moeller
|in:Economy in Brief
Summary
- Applications for loan refinance drop sharply.
- Mortgage rate increase is first in nine weeks.
- Decline in average loan size reverses earlier gain.
Mortgage applications declined 6.2% (+27.4% y/y) in the week ending March 14, after rising 11.2% in the prior week, according to the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey. Applications to refinance existing mortgages declined 12.8% (+69.6% y/y) in the week ended March 14 after rising 16.2% in the prior week. Applications for loans to purchase a home edged 0.1% (6.0% y/y) higher last week following a 7.0% increase in the week ended March 7.
The effective interest rate on a 30-year fixed rate loan edged up to 6.90% in the week ended March 14 and reversed the prior week’s decline to 6.85%. The effective rate on a 15-year fixed rate loan was little changed at 6.22%. The rate on a 30-year jumbo loan rose to 6.89% in the week ended March 14 from 6.82% in the prior week, while the rate on a 5-year ARM declined to 5.98% from 6.07% in the week ended March 7.
The share of applications to refinance an existing mortgage fell to 42.0% in the week ended March 14 from 45.6% in the week of March 7. The share of loans that have an adjustable rate declined to 6.7% in the latest week from 7.2% in the prior week.
The average size of a mortgage loan fell 4.2% (+3.1% y/y) to $401,900 in the week ended March 14 after increasing 5.1% to $419,700 in the week ended March 7. The average size of a loan to purchase a home was $451,000, down 2.1% (+1.3% y/y) from $460,800 the week before. The size of a loan to refinance an outstanding mortgage declined 9.8% (+24.7% y/y) to $334,200 in the week ended March 14 from $370,600 in the week ended March 7.
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.
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