U.S. Mortgage Applications Declined in the First Week of January
Summary
- Applications to purchase dropped, while applications to refinance rose.
- Rates on 30-year fixed-rate loans were unchanged.
- Average loan size declined in latest week.
Mortgage applications declined 3.7% (-11.6% y/y) in the week ended January 3, 2025, after the drop of 12.6% (+0.8% y/y) in the week ended December 27. Applications for loans to purchase a house dropped 6.6% (-14.1% y/y) in the week ended January 3, following a decline of 6.8% (-2.8% y/y) in the week ended December 27. Applications to refinance a loan rose 1.5% (-5.7% y/y) in the latest week, after the sharp decline of 23.4% (+10.3% y/y) in the week ended December 27. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey and the amounts quoted here are seasonally adjusted.
The effective interest rate on a 30-year fixed rate loan was 7.18% in the week ended January 3, unchanged from the week ended December 27 but up 10bps from 7.08% in the week ended December 20. The effective rate on a 15-year fixed rate mortgage inched up to 6.62% in the week ended January 3, from 6.61% in the week ended December 27. The rate on a 30-year jumbo loan dropped 12bps to 7.20% in the January 3 week, after rising 16bps to 7.32% in the week ended December 27. The rate on a 5-year ARM dropped another 14bps to 6.07% in the week ended January 3, after declining 11bps to 6.21% in week ended December 27.
The share of applications to refinance an existing mortgage was 40.8% in the week ended January 3, up from 39.4% in the week ended December 27. That share had been 44.3% in the December 20 week. The share of applications for ARMs was 4.7% in the latest week down from 5.2% in the week ended December 27.
The average loan size in the January 3 week was $359,500, down 2.3% (+1.7% y/y) from $367,800 in the December 27 week. The average size of an application for a loan to purchase a house was down 2.0% (+2.9% y/y) to $414,400 in the week ended January 3 from $422,900 in the December 27 week. The average size of an application to refinance an existing loan declined by 1.0% (+2.1% y/y) to $279,900 in the week ended January 3 from $282,800 in the week ended December 27.
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.
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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