U.S. Mortgage Applications Decline Even as Interest Rates Ease
by:Tom Moeller
|in:Economy in Brief
Summary
- Trend in mortgage applications has been sideways since last summer.
- Purchase & loan refinancing applications refinancing slip.
- Rates on 30-year fixed-rate mortgage loans decline slightly.
Mortgage applications fell 0.7% (-13.4% y/y) in the week ended March 22 following a 1.6% weakening in the prior week. These declines followed strong increases in the prior two weeks. Applications for loans to purchase a home eased 0.2% (-15.6% y/y) in the latest week after falling 1.2% in the prior week. Applications to refinance a loan declined 1.6% (-8.6% y/y) in the week of March 22 after falling 2.5% 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 slipped to 7.10% in the week ended March 22 from 7.16% in the prior week. It compared to a high of 8.12% in mid-October of last year. The rate on 15-year fixed-rate mortgages was little-changed at 6.65% in the latest week. The rate on 30-year Jumbo loans fell to 7.25% last week from 7.29% the week prior, while the rate on the 5-year ARM eased to 6.51% from 6.53%. These rates were below the 7.31% high in the last week of October.
The share of applications for refinancing an existing loan fell to 30.8% in the week ended March 22 from 31.2% in the week ended March 15. That compared to a high of 39.7% in mid-December. The percentage of applications that were ARMs fell w/w to 7.0% from 7.2%. This has increased from a low of 5.4% in early-January.
The average loan size eased 0.7% (+0.7% y/y) to $387,000 in the week ended March 22 from $389,800 in the prior week. The average size of a purchase loan also fell 0.7% (+2.6% y/y) to $441,800 in the latest week from $445,000 in the prior week. The average loan size to refinance a mortgage decreased 1.5% (-2.9% y/y) to $264,000 in the week ended March 22 from $267,900 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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