U.S. Mortgage Applications Edged Up as Rates Continued to Rise
by:Sandy Batten
|in:Economy in Brief
Summary
- Total applications edged up 0.6% w/w after two consecutive weekly declines.
- Mortgage interest rates continued to rise with the 15-year and 30-year rates reaching 23-year highs.
Mortgage applications edged up 0.6% w/w (-16.3% y/y) in the week ended October 6 after having plummeted 6.0% in the prior week according to the Mortgage Bankers Association Weekly Mortgage Applications Survey. The September 29 level of total applications had been the lowest since August 1995. Applications for loans to purchase a house increased 0.7% w/w (-19.4% y/y) after a 5.7% weekly decline in the previous week, while applications to refinance a loan inched up 0.3% w/w (-8.8% y/y) following a 6.6% w/w plunge in the prior week.
The effective interest rate on a 30-year fixed rate loan increased to 7.89% in the week ended October 6, the highest since the week ended November 10, 2000, from 7.76% in the previous week. The effective rate on a 15-year fixed-rate loan increased to 7.27% in the most recent week, the highest since he week of December 8, 2000, from 7.15% in the prior week.in the latest week. The rate on a 30-year Jumbo loan increased to 7.87% from 7.73% while the rate on the 5-year adjustable-rate mortgage fell to 6.66% from 6.94%, its second consecutive weekly decline.
The share of loans to refinance an existing loan eased to 31.6% in the week ended October 6 from 31.7% in the prior week. This is down markedly from around 50% when the Fed began raising its fed funds rate target in March 2022. With a 15.3% w/w increase in the applications for adjustable-rate mortgages in the most recent week, the share of adjustable-rate loans continued to rise, increasing to 9.2%, its highest level since November 2022, from 8.0% in the previous one.
The average size of a mortgage loan edged up 0.4% w/w, its first weekly increase in four weeks, to $365,900 in the week ended October 6. The average size of a loan to purchase a house increased 1.3% w/w to $421,600, while the average size of a refinance loan fell 3.2% w/w to $245,100, its lowest value March 2017.
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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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