Mortgage Loan Applications Continue to Fall
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase & refinance applications drop for second week.
- Effective interest rate increases again.
- Average loan size improves slightly.
Mortgage loan applications fell 4.6% (-35.0% y/y) in the week ended May 19 after declining 5.7% in the prior week. Applications were at the lowest level since the first week of March These data come from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Applications for loans to purchase a home fell 4.3% (-29.8% y/y) in the latest week following a 4.8% decline in the prior week. Applications to refinance an existing loan weakened 5.4% (-44.3% y/y) last week after a 7.7% decline in the prior week.
The share of loans to refinance an existing mortgage in the week of May 19 held steady at 27.4%. The share of loans with an adjustable rate remained low at 6.7% versus 6.5% the week before.
The effective interest rate on a 30-year fixed rate loan rose to 6.88% last week versus 6.74% the week before. That rate was 7.02% early in March. The rate on a 15-year fixed-rate mortgage rose to 6.33% last week, the highest level since the second week of March. The rate on a 30-year Jumbo loan rose to 6.74% last week from 6.57% the week before. For a 5-year ARM loan, the effective rate rose to 6.17%, roughly double the rate at the end of 2021.
The average size of a mortgage loan rose 0.6% to $393,600 last week (+2.8% y/y) from $391,300 in the prior week. The average size of a purchase loan rose to $442,000 last week, up 0.4% w/w and 2.3% y/y. Refinance loan average size rose 1.5% to $265,100 in the week of May 19, down 5.4% y/y.
The Mortgage Bankers 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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