U.S. Mortgage Applications Decline; Interest Rates Remain High
by:Tom Moeller
|in:Economy in Brief
Summary
- Total applications weaken sharply to lowest level since 1995.
- Applications for purchase loans & refinancing decline.
- Mortgage interest rates remain at highest level since 2000.
Mortgage applications declined 6.9% (-18.4% y/y) in the week ended October 13 after rising 0.6% in the prior week, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey. Applications for loans to purchase a home decreased 5.6% (-21.0% y/y) after rising 0.7% in the previous week. Applications to refinance a loan weakened 9.9% (-11.9% y/y) following a 0.3% gain in the prior week.
The effective interest rate on a 30-year fixed rate loan of 7.90% in the week ended October 13 barely changed from 7.89% in the prior week. This was the highest rate since November 2000. The effective rate on a 15-year fixed-rate loan eased to 7.24% from 7.27%. The rate on a 30-year Jumbo loan fell to 7.80% from 7.87% while the rate on the 5-year adjustable-rate mortgage rose to 7.07% from 6.66%.
The share of loans to refinance an existing loan fell to 30.5% in the week ended October 13 from 31.6% in the prior week. This is down sharply from roughly 50% when the Fed began raising its fed funds rate target in March 2022. The share of adjustable-rate loans rose to 9.3% from 9.2%. It was the highest level since November 2022.
The average size of a mortgage loan fell 0.9% (-1.1% y/y) to $362,500 in the week ended October 13. The average size of a loan to purchase a home declined 2.1% (+2.5% y/y) to $412,600, while the average size of a refinance loan rose 1.3% (-9.8% y/y) to $248,300.
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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