U.S. Mortgage Applications Decline for a Second Week
Summary
- Applications for loans to purchase declined in the week of December 2.
- Applications for refinancing a loan rose in the latest week after a sharp drop in the prior week.
- Mortgage rates declined again on fixed rate loans but rose for ARMs.
Mortgage applications declined 1.9% (-66.9% y/y) in the week ended December 2, after a decline of 0.8% w/w (-65.6% y/y) in the week ended November 25. These data come from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house declined 3.0% (-40.5% y/y) after rising 3.8% (-41.7% y/y) in the prior week, while applications for refinancing a loan rose 4.7% (-86.4% y/y) following a 12.9% (-85.9% y/y) drop in the November 25 week.
The share of applications for refinancing an existing loan rose to 28.7% in the week of December 2, from 26.1% in the week before. These latest weeks' shares compare with 65% during the last weeks of 2021. The percentage of applications that were ARMs was down to 7.60% in the latest week from 9.0% the week prior.
The effective rate on a 30-year fixed-rate loan was 6.60% in the week ended December 2, down 8 bps from 6.68% the prior week. The latest remains significantly above the 3.42% average rate that prevailed in December of last year. The rate on 15-year fixed-rate mortgages was 5.98% in the week ended December 2, down 21 bps from 6.19% the week prior. The rate on 30-year Jumbo loans was 6.23%, down 29 bps from 6.52% the prior week, while that on a 5-year ARM was 5.93% in the December 2 week, up 12 bps from 5.81% the week prior.
The average loan size dropped to $351,000 (5.1% y/y) in the week ended December 2 from $367,400 in the November 25 week. The series high of $401,900 was reached in the week ended May 6. The average size of a purchase loan was $387,300 (-2.5% y/y) in the latest week, down from $399,900 the week before, while the average size of a loan to refinance a mortgage reached $261,000 (-12.5% y/y) from $275,100.
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.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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