U.S. Mortgage Applications Edge Higher as Interest Rates Slip
by:Tom Moeller
|in:Economy in Brief
Summary
- Modest rise in applications last week adds to sharp increase in prior week.
- Weekly mortgage rates decline for third straight week.
- Refinancing activity declines again.
Mortgage applications rose 0.5% (-34.5% y/y) in the week ending June 16 after a 7.2% increase in the prior week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.
Applications for loans to purchase a house increased 1.5% (-31.8% y/y) last week after rising 7.6% in the week prior. These increases followed four straight weeks of decline. Applications for loan refinancing declined 2.1% (-40.4% y/y), the fifth decline in the last six weeks.
The share of applications for refinancing an existing loan fell to 26.9% of total applications in the June 16 week. The adjustable-rate mortgage (ARM) share of activity fell to 6.3%, the lowest in nine weeks.
The effective interest rate on a 30-year fixed-rate loan eased to 6.92% last week, a four-week low. The rate on 15-year fixed-rate mortgages fell to 6.43% after rising to 6.51% in the previous week. The rate on a 30-year Jumbo loan was unchanged at 6.94% in the latest week. The rate on a 5-year ARM loan rose to a record 6.61% from 6.33% in the previous week. It was increased from 5.83% at the end of last year.
The average size of a mortgage loan increased to $383,200 and was higher than the average $347,600 at the end of last year. The average size of a purchase loan rose to $428,400 (1.5% y/y) while the average size of a loan to refinance a mortgage fell w/w to $260,700 (-10.1% y/y) from $263,200.
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.
Semiannual Monetary Policy Report to the Congress from Federal Reserve Chair Jerome H. Powell is available here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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