U.S. Mortgage Applications Dropped in the Last Week of September
Summary
- Total applications plummeted 6.0%.
- Purchase applications fell 5.7%
- Effective rate on loans to purchase 7.76%, high since late 2000.
Mortgage applications plummeted 6.0% (-18.5% y/y) in the week ended September 29, after a 1.3% (-25.6% y/y) decline in the week ended September 22 according to the Mortgage Bankers Association Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 5.7% (-21.5% y/y) in the latest week, after a 1.5% (-27.3% y/y) decline in the week of September 22, while applications to refinance a loan declined 6.6% (-10.7% y/y) in the latest week after the decline of 0.9% in prior week (-21.4% y/y).
The effective interest rate on a 30-year fixed rate loan increased to 7.76% in the week ended September 29 from 7.61% in the week prior. The latest rate, 7.76%, is comparable to the 7.83% rate reached in the week of October 20, 2000, that is, close to 23 years ago. The effective rate on a 15-year fixed-rate loan was 7.15% in the latest week, up from 7.02% the week before. The rate on a 30-year Jumbo loan ticked up to 7.73% from 7.57%, while the 5-year adjustable-rate declined to 6.94% from 7.06%.
The share of adjustable rate loans increased to 8.0% in the week of September 29, from 7.5% in the September 22 week. The share of loans to refinance an existing loan eased to 31.7% in the latest week from 31.9% the week prior.
The average size of a mortgage loan was little changed at $364,400 in the week ending September 29 from $364,900 in prior week. The average size of a loan to purchase a house was $416,200 in the week of September 29, little changed from the prior week’s $416,300, while the average size of a refinance loan was $253,200, down from $255,100.
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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