U.S. Mortgage Applications Decline Last Week While Interest Rates Ease
by:Tom Moeller
|in:Economy in Brief
Summary
- Mortgage applications fall in three of last four weeks.
- Home purchase applications decline while refinancing edges higher.
- Mortgage interest rates continue to fall.
Mortgage applications fell 2.2% (+1.2% y/y) in the week ended July 19 after a 3.9% rise in the prior week. Applications for home purchase fell 4.0% (-15.3% y/y) last week following a 2.7% drop. Applications for refinancing added 0.3% (38.3% y/y) to the prior week’s 15.2% gain. 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 declined to 6.99% in the week ended July 19 from 7.03% in the week prior. It remains below the recent high of 7.48% in the last week of April. The rate on 15-year fixed-rate mortgages dropped to 6.34% last week from 6.62% in the prior week. The rate on 30-year Jumbo loans was little changed at 7.25% last week while the rate on the 5-year ARM fell to 6.38% from 6.55%.
The share of applications for refinancing an existing loan rose to 39.7% in the week ended July 19 from 38.8% in the prior week. That compared to a recent high of 39.7% in mid-December. The percentage of applications which were ARMs held steady at 5.8% last week. The recent low of 5.4% was reached in early January.
The average loan size rose 1.4% (-5.5% y/y) to $369,700 last week and reversed the prior week’s decline. The average loan size for purchase roe 2.9% (-0.9% y/y) to $429,000 in the latest week after a 1.9% decline in the prior week while the average loan for refinancing fell 0.9% (+7.4% y/y) to $279,500 after a 5.6% rise 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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