U.S. Mortgage Applications Decline as Interest Rates Increase
by:Tom Moeller
|in:Economy in Brief
Summary
- Last week’s decline in applications reverses prior week’s gain.
- Purchase applications & refinancing applications both fall.
- Interest rates continue to rise.
Mortgage applications fell 2.7% (-9.3% y/y) in the week ended April 19 after a 3.3% rise in the prior week. Home purchase loans declined 1.0% (-14.7% y/y) following a 5.0% rise in the prior week. Applications to refinance a loan declined 5.6% (+3.3% y/y) after improving 0.5% one week earlier. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The effective interest rate on a 30-year fixed-rate loan rose to 7.43% last week after rising to 7.32% in the prior week. It compared to a high of 8.12% in mid-October of last year and a low of 6.87% in the fourth week of December. The rate on 15-year fixed-rate mortgages rose to 6.91% in the latest week from 6.80% the prior week. The rate on 30-year Jumbo loans increased to 7.62% last week from 7.54% in the week prior, while the rate on the 5-year ARM rose to 6.96% from 6.74%. These rates remain below the 7.31% high in the last week of October but above the recent low of 5.93% in the last week of December.
The share of applications for refinancing an existing loan declined to 30.8% in the week ended April 19 from 32.1% in the prior week. That compared to a high of 39.7% in mid-December. The percentage of applications that were ARMs rose to 7.60% from 7.3%. The recent low of 5.4% was reached in early-January.
The average loan size fell 1.1% (-0.7% y/y) to $381,900 in the week ended April 19 from $386,200 in the prior week. The average size of a purchase loan declined 2.2% (+1.5% y/y) to $437,900 in the latest week from $447,900 in the prior week. The average loan size to refinance a mortgage edged up 0.2% (-0.4% y/y) to $255,800 last week from $255,300 in the prior 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.
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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