U.S. Mortgage Applications Fall Sharply Last Week; 30-year Fixed-Rate Steadies
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase & refinancing applications decline.
- Interest rate on 30-year fixed-rate loan remains near May 2023 low.
- Average loan size declines.
Mortgage loan applications declined 10.1% (+22.2% y/y) in the week ended August 16, following an unrevised 16.8% rise in the week ended August 9. Applications for home purchase loans fell 5.2% (-8.0% y/y) following a 2.8% rise during the prior week. Applications to refinance a mortgage backpedaled 15.2% (+90.0% y/y) last week after surging 34.5%. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The effective interest rate on 30-year fixed-rate loans was fairly steady at 6.67% in the week ended August 16, but has fallen from a high of 7.48% at the end of April. It was the lowest rate since the first week of May 2023, down from an 8.12% high in the third week of October, 2023. The effective rate on 15-year fixed-rate loans rose to 6.22% in the latest week from 6.13% the week before. The rate on 30-year Jumbo loans slipped to 6.84% from 6.88% in the week of August 9. In contrast, the rate on 5-year ARM loans rose w/w to 6.46% from 6.36%. It remained below the 7.31% high last October.
The share of applications to refinance an existing loan fell to 46.3% in the week of August 16 from 48.6% in the prior week. The latest figures are increased from a low of 27.2% averaged in April 2023. The share of applications for ARMs fell to 5.5% last week from 7.3% in the prior week. A recent low for the ARM share was 5.4% in the week ended January 5.
The average size of mortgage loans declined 7.5% (+2.8% y/y) to $372,600 in the week of August 16 after rising to a record $403,000 during the prior week. The average size of a loan to purchase a home eased 0.2% (+4.6% y/y) to $426,300 last week and has been roughly steady for three weeks. The size of a refinanced loan fell 17.8% (+21.9% y/y) to $310,300 in the week of August 16 after surging to $377,600 during the previous 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.
The minutes of the latest FOMC meeting can be found 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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