U.S Mortgage Applications Jumped in The Latest Week

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.