U.S. Mortgage Applications Have First Weekly Rise Since Mid-July
Summary
- Modest increases for both loans to purchase and to refinance.
- Rates change little after prior week’s jumps.
- Average loan size ticks upward after 4 weekly declines.
Mortgage applications increased 2.3% in the week ended August 25 (-27.3% y/y), after declining 4.2% in the prior week and their first weekly rise since the July 14 week. This information, known as the Market Volume Index, comes from the Mortgage Bankers Association Weekly Mortgage Applications Survey and is seasonally adjusted.
Applications for loans to purchase a house rose 2.0% (-27.2% y/y) in the August 25 week, after falling 5.0% the week before. Application for refinancing an existing loan also increased in the latest week, rising 2.5% (-27.6% y/y). While these weekly volume numbers did increase, the rises are modest, but it is encouraging that they did not fall again after five consecutive declines.
The effective interest rate on a 30-year fixed-rate loan was 7.53% in the August 25 week, down minimally from 7.54% in the prior week. These two weeks compare with 7.42% in October 2022 and are the highest since May 2001. The rate on 15-year fixed-rate loans was 7.00% last week, up modestly from 6.98% the week before. That on a 5-year adjustable rate mortgage [ARM] was 6.92% last week, up from 6.89% the prior week.
The share of loans to refinance an existing mortgage was 30.1% in the August 25 week, up from 29.5% the week before. This was the largest share since 30.5% in the February 3 week, but refinancings in the last 15 months have been quite modest compared to a 66% average during August 2021. The share of adjustable rate mortgage applications was just 7.5% in the August 25 week, down slightly from 7.6% the week before but up modestly from roundly 6.5% since April.
The average size of a mortgage loan was $367,200 (-0.5% y/y) in the August 25 week, up from $362,600 the prior week but down from an average of $382,000 in the prior six months. The average size of a loan to purchase a house was $413,100 (+1.0% y/y) in the August 25 week, down somewhat from a six-month average of $428,700. The average size of a refinance loan was $260,400 (-5.9%) this past week, very close to its six-month average of $261,500.
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.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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