U.S Mortgage Applications Jumped in The Latest Week
Summary
- Mortgage applications jumped 7.4% in the December 8 week.
- Mortgage applications for loan refinancing soared 19.4%.
- Effective mortgage interest rates dropped in the latest week, with the 30-year fixed rate down 11bps, the seventh consecutive weekly decline.
Mortgage applications jumped 7.4% w/w (-7.7% y/y) in the week ending December 8, after a rise of 2.8% w/w (-11.3% y/y) in the week ending December 1, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The latest reading was the sixth successive weekly gain. Applications for loans to purchase a house rose 3.5% (-18.1% y/y) following a decline of 0.3% (-17.7% y/y) in the prior week. And applications for loan refinancing soared 19.4% (27.2% y/y) in the latest week, following an already strong rise of 13.9% (9.5% y/y) in the week ending December 1.
Mortgage interest rates fell further in the week ending December 8. The effective interest rate on a 30-year fixed-rate loan dropped 11bps to 7.24% from 7.35% in the week ending December 1, and down from 7.80% in the November 10 week. The rate on 15-year fixed-rate mortgages fell 17bps to 6.82% in the latest week, from 6.99% in the prior week. The rate on a 30-year Jumbo loan dropped 14bps to 7.33% in the week ending December 8 from 7.47% in the week ending December 1, while the rate on a 5-year ARM loan declined 9bps to 6.75% in the latest week, from 6.84% from 6.87% in the week ending December 1.
The share of applications for refinancing an existing loan rose to 39.2% in the week of December 8, up from 34.7% in the week ending December 1. The last time it had reached a level this high was in early April 2022. The adjustable-rate mortgage (ARM) share of activity fell to 6.3% in the latest week, from 7.4% in the prior week, the sixth consecutive w/w fall.
The average size of a mortgage loan rose 2.7% w/w (-2.5% y/y) to $355,400 in the week ending December 8, after a decline of 4.5% w/w (-1.5% y/y) to $345,900 in the week ending December 1. The average size of a loan to purchase a home rose 2.9% (1.6% y/y) to $407,900 in the latest week, after a decline of 3.6% (+2.4% y/y) to $396,500 in the prior week. The average size of a loan to refinance a mortgage jumped 9.0% (-0.7% y/y) to $273,700 in the week ending December 8, following the slight decline of 0.3% (-3.8% y/y) to $251,000 in the week ending December 1.
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.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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