U.S. Mortgage Applications Fall as Interest Rates Rise
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase loan applications decline for third straight week.
- Applications for loan refinancing weaken moderately.
- 30-year fixed-rate on mortgage loans increases to nine-week high.
Mortgage applications declined 2.3% (-4.6% y/y) in the week ended February 9, after rising 3.7% in the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a home fell 2.5% (-11.4% y/y) last week after weakening 0.6% and 11.4% in the prior two weeks. Applications to refinance a loan fell 2.1% (+12.1% y/y) after rising 12.3% in the first week of this month.
The share of applications for refinancing an existing loan fell to 34.2% in the week ended February 9 from 35.4% in the prior week. The percentage of applications that were ARMs rose to 7.0% last week from 6.4% in the prior week. These levels are increased from a 5.4% low in the first week of January.
The effective rate on a 30-year fixed-rate loan rose to 7.06% in the week ended February 9, its highest level since the second week of December. It remained below the 8.12% high in mid-October of last year. The rate on 15-year fixed-rate mortgages rose to 6.77% in the latest week from 6.58% in the prior week. The rate on 30-year Jumbo loan increased to 7.12% last week from 7.02% while the rate on the 5-year ARM rose to 6.52%, its highest level in eight weeks.
The average loan size rose 1.4% (-0.2% y/y) to $382,000 in the week ended February 9, after falling to $376,600 in the prior week. The average size of a purchase loan increased 1.5% (2.7% y/y) to $441,300 in the latest week after falling to $434,800 in the prior week. The average loan size to refinance a mortgage declined 1.1% (+0.1% y/y) to $267,600 in the latest week after holding fairly steady at $270,500 in the prior week.
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.
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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