U.S. Mortgage Applications Dropped in the Last Week of 2023
Summary
- Total mortgage applications dropped 9.4% in the week of December 29 from 2 weeks earlier.
- Applications for loans to purchase and to refinance also dropped in the last week of 2023.
- The average effective rates on loans ended the year lower than 2 weeks prior.
Mortgage applications decreased 9.4% from two weeks earlier in the week ended December 29. These data come from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey, with data for the weeks ending December 22 and 29 released simultaneously. Applications rose by 1.4% (-5.5% y/y) in the week ended December 22 but dropped by 10.7% (-6.0% y/y) in the week ended December 29. Applications for loans to purchase a house rose 2.4% (-16.4% y/y) in the week ended December 22 and declined by 7.6% (-12.2% y/y) in the week ended December 29. Applications for refinancing a loan decreased by 0.1% (+34.4% y/y) in the December 22 week and by 18.1% (+15.2% y/y) in the December 29 week.
The share of applications for refinancing an existing loan was 39.4% in the week of December 22 and dropped to 36.3% in the week of December 29. The percentage of applications that were ARMs stayed constant at 6.3% in the December 22 week but eased to 6.0% in the December 29 week.
The effective rate on a 30-year fixed-rate loan dropped by 14bps to 6.87% in the week ended December 22 but rose 7bps to 6.94% in the week ended December 29, though still below the 7.01% rate that prevailed in the December 15 week. The rate on 15-year fixed-rate mortgages declined by 7bps to 6.53% in the week of December 22 and by 9bps to 6.44% in the December 29 week its lowest since mid-June 2023. The rate on 30-year Jumbo loan decreased 33bps to 6.95% in the December 22 week and edged up 2bps to 6.97% the following week. The rate on the 5-year ARM declined 6bps to 6.48% in the week of December 22 and dropped another 55bps to 5.93% in the week of December 29.
The average loan size rose 2.1% w/w (1.4% y/y) to $367,600 in the week ended December 22 but decreased 3.0% w/w (+2.6% y/y) to $356,500 in the week ended December 29. The average size of a purchase loan decreased 0.1% w/w (+4.5% y/y) to $415,500 in the week ended December 22 and by 2.0% w/w (+5.1% y/y) to $407,200 in the week ended December 29. The average loan size to refinance a mortgage rose 6.9% w/w (6.7% y/y) to $293,800 in the December 22 week but dropped by 9.0% w/w (+4.7% y/y) to $267,500 in the week ended December 29.
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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