U.S. Mortgage Applications Dropped in Latest Week
Summary
- Loans to purchase and to refinance dropped in the latest week.
- Rates fell modestly.
- Average loan size declined.
Mortgage applications dropped 2.9% (-28.9% y/y) in the week ended September 1, following a rise of 2.3% in the week ended August 25 (-27.3% y/y). This information, known as the Market Volume Index, comes from the Mortgage Bankers Association Weekly Mortgage Applications Survey and is seasonally adjusted.
Applications for loans to purchase a house declined 2.1% (-28.3% y/y) in the September 1 week, after a rise of 2.0% (-27.2% y/y) in the August 25 week. Applications for refinancing an existing loan contracted 4.7% (-30.2% y/y) in the latest week, after rising 2.5% (-27.6% y/y) in the prior week.
The effective interest rate on a 30-year fixed-rate loan was 7.41% in the September 1 week, down from 7.53% in the August 25 week. This latest week compares with 7.42% in October 2022. The prior two weeks were the highest since May 2001. The rate on 15-year fixed-rate loans was 6.87% last week, down from 7.00% the week before. That on a 5-year adjustable-rate mortgage [ARM] was 6.74% last week, down from 6.92% the prior week.
The share of loans to refinance an existing mortgage was 30.0% in the September 1 week, little changed from the 30.1% share in the August 25 week. These two weeks were the largest share since 30.5% in the February 3 week, but refinancings in the last 15 months have been quite modest compared to a 66% average during August 2021. The share of adjustable-rate mortgage applications declined to 6.7% in the latest week from 7.5% in the August 25 week. That share has hovered around 6.5% since April.
The average size of a mortgage loan was $361,700 (-1.6% y/y) in the September 1 week, down from $367,200 (-0.5% y/y) in the August 25 week and from an average of $382,000 in the prior six months. The average size of a loan to purchase a house was $408,800 (-0.6% y/y) last week, down from $413,100 (+1.0% y/y) in the August 25 week and from a six-month average of $428,700. The average size of a refinance loan was $252,000 (-6.4% y/y) in the latest week, down from $260,400 (-5.9% y/y) this past week and from its six-month average of $261,400.
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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