Mortgage Loan Volume Rebounds in Latest Week
Summary
- Mortgage applications rose, pushed by refi activity.
- Effective interest rates decrease slightly for all major types of mortgages.
- Average loan size increases, also reflecting advance in refi loans.
Mortgage loan applications advanced 6.3% (-36.5% y/y) in the week ended May 5, after the 1.2% decrease (-39.1% y/y) in the April 28 week. This latest sizable weekly gain still leaves the volume of mortgage applications in the lowest range since 1997. These data come from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Applications for loans to purchase a house rose 4.8% (-32.0% y/y) in the May 5 week, following a 2.0% decrease (-32.2% y/y) the week before. Applications to refinance an existing loan rose 10.0% (-44.5% y/y) in the latest week, after just a 0.8% rise the prior week (-50.5% y/y).
The share of loans to refinance an existing mortgage in the May 5 week was 28.0%, up from 27.2% in the April 28 week. The share of loans with an adjustable rate remained modest in the May 5 week, decreasing to 6.8% from 7.3% the week before.
The effective interest rate on a 30-year fixed rate loan was 6.66% in the May 5 week, a tiny reduction from 6.69% the week before. That rate was 7.02% in the March 3 week and 7.42% back on October 21. The rate on a 15-year fixed rate mortgage was 6.05% in the May 5 week, down from 6.14% in the April 28 week. The rate on a 30-year Jumbo loan was 6.48% in the latest week, down slightly from 6.53% the week before. For a 5-year ARM loan, the effective rate was 5.64% in the May 5 week, noticeably lower than the 5.90% in the April 28 week.
The average size of a mortgage loan was $395,000 in the May 5 week, up 0.4% (-1.75 y/y) from the April 28 week’s $393,600, which represented an increase of 2.3% (+0.3% y/y) from the week before that. The average size of a purchase loan was $440,700 in the latest week, down 0.1% (-2.0% y/y) from $441,100 the week before. Refinance loans averaged $277,900 in the May 5 week, up 4.4% from the prior week, but down 8.0% from the week a year ago.
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.
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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