U.S. Mortgage Applications Fell Further
by:Sandy Batten
|in:Economy in Brief
Summary
- Applications fell for the seventh time in the past eight weeks.
- Purchase applications increased while refinance applications fell.
- Mortgage interest rates rose modestly but remained slightly off recent highs.
Mortgage applications fell a seasonally adjusted 0.8% w/w (-28.5% y/y) in the week ended September 8, their seventh decline in the past eight weeks, following a 2.9% w/w drop in the previous week, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey. Applications for loans to refinance an existing mortgage declined 5.4% w/w (-31.1% y/y) on top of a 4.7% weekly decline in the preceding week. By contrast, applications for loans to purchase a house rebounded 1.3% w/w (-27.5% y/y) following a 2.1% w/w decline in the previous week.
The effective interest rate on a 30-year fixed-rate loan rose to 7.48% in the week ended September 8, after two weekly declines, from 7.41% in the previous week. This rate has generally risen over the past 18 months as the Federal Reserve has raised its fed funds rate target by 525 basis points. Readings in late August were the highest since 2001. The effective 15-year rate rose to 6.97% from 6.87% in the previous week. The rate on a 5-year adjustable-rate mortgage (ARM) increased to 7.02% from 6.74% in the prior week. And the rate on a 30-year Jumbo mortgage edged up to 7.45% from 7.43%.
The share of loan applications for refinancing slipped to 29.1% in the week ended September 8 from 30.0% in the previous week. The general rise in mortgage interest rates over the past 18 months has significantly reduced the refinancing share of applications which stood at more than 60% in early 2022. The share of adjustable-rate mortgage applications rose to 7.5% from 6.7% in the previous week and is off its recent low of 5.9% on July 21.
The average size of a mortgage loan increased to $368,100 in the week ended September 8, a 1.8% gain from $361,700 in the prior week. The average size of a loan for purchase rose 1.0% w/w to $412,900 while the average size of a loan for refinancing increased 2.7% w/w to $258,800.
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.
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.
