Mortgage Applications Reverse Prior Week’s Increase
Summary
- Applications decline for both loans to purchase and to refinance.
- Effective interest rates were down on standard-sized mortgages, but rose on jumbo loans.
- Average loan sizes fell for both loans to purchase and to refinance.
Mortgage applications declined 6.6% (+18.3% y/y) in the week ended February 14, more than reversing an increase of 2.3% in the February 7 week, according to data from the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 5.9% in the February 14 week (+7.8% y/y), following a decrease of 2.3% the prior week. Applications to refinance existing mortgages fell 7.3% (+39.0% y/y) in the February 14 week, after increasing 9.6% in the February 7 week.
The effective interest rate on a 30-year fixed rate loan eased 2 basis points in the February 14 week to 7.12% from 7.14% the prior week. The effective rate on a 15-year fixed rate loan was down 3 basis points to 6.48% from 6.51% the week before. The rate on a 30-year jumbo loan rose 11 basis points to 7.18% in the February 14 week from 7.07% the prior week while the rate on a 5-year ARM decreased to 6.36% from 6.44% in the week ended February 7.
The share of applications to refinance an existing mortgage eased to 38.7% in the February 14 week from 40.2% the week before. The share of loans that have an adjustable rate decreased to 5.4% in the February 14 week from 6.0% the prior week.
The average size of a mortgage loan was $382,100 in the February 14 week, down from $393,500 in the February 7 week. In the February 14 week, the average size of a loan to purchase a house was $439,300, down 3.7% from $456,100 the week before; the size of a loan to refinance an outstanding mortgage also fell somewhat to $291,300 in the February 14 week, down 3.1% from the prior week’s $300,500.
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.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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