U.S. Mortgage Applications Dropped in the Last Two Weeks of December
Summary
- Applications to purchase and to refinance plummeted.
- Rates on 30-year fixed-rate loans rose by 23bps in the last 2 weeks.
- Average loan size declined in the last 2 weeks.
Mortgage applications dropped 12.6% (+0.8% y/y) in the week ended December 27, after declining by 10.7% (+3.0% y/y) in the week ended December 20 and by 0.7% (+16.9% y/y) in the week ended December 13. Applications for loans to purchase a house dropped 6.8% (-2.8% y/y) in the week ended December 27, following a decline of 6.7% (-3.7% y/y) in the week ended December 20. Applications to refinance a loan plummeted 23.4% (+10.3% y/y) in the week ended December 27, following a decline of 16.4% (+18.0% y/y) in the week ended December 20. 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 December 27, up 10bps from 7.08% in the week ended December 20, and up 23bps from 6.95% in the week ended December 13. The effective rate on a 15-year fixed rate mortgage rose 6bps to 6.61% in the week ended December 27, after a 23bps rise to 6.55% in the week of December 20. The rate on a 30-year jumbo loan rose 16bps to 7.32% in the week ended December 27, after rising 13bps to 7.16% in the December 20 week. The rate on a 5-year ARM dropped 11bps to 6.21% in week ended December 27 after rising by 11bps to 6.32% in the week ended December 20.
The share of applications to refinance an existing mortgage was 39.4% in the week ended December 27, down from 44.3% in the December 20 week and from 46.7% in the December 13 week. The share of applications for ARMs was 5.2% in the latest week, down from 5.5% in the December 20 week and from 5.3% in the week ended December 13.
The average loan size in the December 27 week was $367,800, down 0.8% (+3.2% y/y) from $370,900 in the week ended December 20, which was down 1.4% (+0.9% y/y) from the week ended December 13. The average size of an application for a loan to purchase a house was down 0.3% in each of the last two weeks, to $422,900 (+3.9% y/y) in the December 27 week and to $424,100 (+2.1% y/y) in the December 20 week. The average size of an application to refinance an existing loan declined by 7.0% (+5.7% y/y) to $282,800 in the week ended December 27 and by 4.9% (3.5%), to $304,100 in week of December 20.
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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