Mortgage Applications Declined in the February 21 Week
Summary
- Applications for loans to purchase edged up while those to refinance fell.
- Effective interest rates on all mortgage loans fell in the latest week.
- Average loan sizes rose for both loans to purchase and to refinance.
Mortgage applications declined 1.2% (+23.8% y/y) in the week ended February 21, after a decline of 6.6% (+18.3% y/y) in the week ended February 14, according to data from the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house edged up 0.2% (13.1% y/y) in the February 21 week, after a drop of 5.9% (+7.8% y/y) in the February 14 week. Applications to refinance existing mortgages fell 3.6% (+44.6% y/y) in the latest week, following a decline of 7.3% (+39.0% y/y) in the February 14 week.
The effective interest rate on a 30-year fixed rate loan fell 6 basis points to 7.06% in the week ended February 21 from 7.12% the prior week. The effective rate on a 15-year fixed rate loan was down 9 basis points to 6.39% from 6.48% the week before. The rate on a 30-year jumbo loan declined 8 basis points to 7.10% in the week ended February 21 from 7.18% in the February 14 week, while the rate on a 5-year ARM decreased 15 basis points to 6.21% from 6.36% in the week ended February 14.
The share of applications to refinance an existing mortgage rose to 38.9% in the February 21 week from 38.7% in the February 14 week. The share of loans that have an adjustable rate was unchanged at 5.4% in the February 21 week from the prior week.
The average size of a mortgage loan was $384,900 in the week ended February 21, up 0.7% (3.0% y/y) from $382,100 in the February 14 week. In the February 21 week, the average size of a loan to purchase a house was $441,100, up 0.4% (2.6% y/y) from $439,300 the week before; the size of a loan to refinance an outstanding mortgage rose 1.8% (19.0% y/y) to $296,600 in the week ended February 21 from $291,300 in the February 14 week.
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.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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