U.S. Mortgage Applications Fall as Interest Rates Steady
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase applications decline and loan refinancing slips.
- Effective interest rate is little-changed w/w.
- Average loan size rebounds.
Mortgage applications fell 1.8% (-25.0% y/y) in the week ending July 21 after a 1.1% increase during the prior week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.
Applications for purchase loans fell 2.5% (-22.9% y/y) in the latest week following a 1.3% decline in the previous week. Applications for loan refinancing slipped 0.4% (-29.6% y/y) following a 7.3% increase in the prior week.
The share of applications for refinancing an existing loan rose to 28.7% of total applications in the July 21 week from 28.4% in the prior week. It remained the highest share since the last week of March. In contrast, the adjustable-rate mortgage (ARM) share of activity fell to 5.9% in the latest week from 6.6% in the prior week.
The effective interest rate on a 30-year fixed-rate loan of 7.06% in the July 21 week compared to 7.07% in the prior week and a high of 7.42% in the third week of October 2022. The rate on a 15-year fixed-rate mortgage of 6.55% compared to 6.54% in the previous week. The rate on a 30-year Jumbo loan edged higher to 7.09% from 7.08% in the prior week. The rate on a 5-year ARM loan fell to 6.47% from a near-record 6.61% in the July 14 week.
The average size of a mortgage loan rose to $383,100 (+4.4% y/y) last week following a decline to $372,900 in the prior week. It was higher than the average of $347,600 at the end of last year. The average size of a purchase loan increased to $432,700 (+5.4% y/y) in the July 21 week after falling to $418,600 in the prior week. The average size of a loan to refinance a mortgage rose to $260,200 (-3.4% y/y) from $257,900 in the prior week.
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.
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.
